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Facebook Hashtags Have More To Do With Ad Targeting Than Twitter

On the surface, hashtags will help Facebook users engage in "public conversations." More importantly, they will help brands target advertising more precisely, which will benefit Facebook's business as well.

Last updated on June 12, 2013, at 4:03 p.m. ET

Posted on June 12, 2013, at 4:03 p.m. ET

Robert Galbraith / Reuters

Facebook announced Wednesday that it is adding support for hashtags — a tool popularized by Twitter as a way to search for a large collection of posts on a single topic.

While this is likely a great thing for users, as it gives them a way to engage with others on Facebook during events like the Super Bowl or a television show, it's also a boon for advertisers, as it helps them better target potential customers — which is something Google has mastered and employed for some time.

In that sense, the move is a way to help brands reach the Facebook users most interested in their products, namely the ones talking about them or something related to them. Indeed, the very reason why Google can command premium ad rates is because when someone searches for "rain boots," an advertiser knows this person is interested in "rain boots" and can look into selling an ad against the search results. That ad space, by extension, is more expensive because it's more valuable to advertisers.

Employing hashtags gives Facebook the ability to charge a premium for ad inventory inside a conversation taking place on its site, since an advertiser has a better shot at converting an impression into a customer for that product — whether that's a pair of rain boots or, more typically on Facebook these days, an app install ad.

In the specific case, say there's a trending #GameofThrones hashtag on Facebook. Brands that have similar demographics to the show's viewers can advertise against that hashtag and try to attract new customers. AllThingsD points out that this is one way Twitter taps into its "second-screen" audience, which is basically people Tweeting about a show or something happening on television.

More importantly, hashtags are a less intrusive way for advertisers to use Facebook's platform since users are presumably interested in messages related to the topic they are following. The social network already does a good job of targeting ads in desktop and mobile News Feeds, but this adds another layer of intent to the equation — just like searching for something on Google signals an intent that's more valuable.

Of course, Facebook's past attempts to employ advertising has generally infuriated its user base, so even with hashtags it will have to tread carefully.