How much is a hashtag worth to you?

This simple symbol has become ubiquitous across many social media platforms. Started in August 2007, the hashtag, also known as the pound (#) sign, was officially adopted by Twitter in 2009 as a way to group conversations and aggregate similar themes. Now, having spread to sites like Instagram, Facebook, LinkedIn, and Pinterest, the hashtag has become a key element of many companies’ social media strategies. With that pervasiveness comes power—and pitfalls.

“Creating an original hashtag gives a firm control over a specific social media space,” says Subodha Kumar, professor of Marketing and Supply Chain Management at the Fox School. Businesses can use this tool to increase recognition of their brand, generate buzz, and expand their audiences.

Yet creating a hashtag does not automatically mean the company owns it, says Kumar. Hashtags are susceptible to hijacking, in which competitors or consumers use the hashtag for unofficial messaging—like when McDonald’s attempted to generate positive publicity with #McDStories but instead received thousands of complaints about the fast food chain.

So, how can a company protect its social media reputation? For some, the answer lies in trademarking.

“The trademark protection of hashtags can increase consumer confidence,” says Kumar. Since the U.S. Patent and Trademark Office began allowing hashtags to be registered trademarks in 2013, more and more companies are protecting their intellectual social media property. In 2015, nearly 1,400 hashtags were submitted in trademark applications. “It prevents other competitors from using similar hashtags to mislead consumers.”

However, trademarks may come with a price. “Trademarking a hashtag may prevent or restrict its use,” Kumar says. The successful spread of a hashtag lies in its ability to be used by anyone, connecting millions of Twitter threads and Instagram photos into one conversation. By trademarking, companies could be stifling this kind of organic engagement.

Little research has been done to understand whether a trademarked hashtag makes a firm’s social media audience more or less engaging. Kumar, along with Naveen Kumar of the University of Memphis and Liangfei Qiu of the University of Florida, wanted to know: does trademarking a hashtag defeat its original purpose?

Kumar and his co-authors investigated the tension in these two opposing sides—the organic nature of a hashtag and the restrictive nature of a trademark—in their paper, “A Hashtag is Worth a Thousand Words: An Empirical Investigation of Social Media Strategies in Trademarking Hashtags.”

The researchers compared firm-level tweet data from 102 companies, split between a “treated” group of companies who had trademarked a hashtag between 2014 and 2017 and a “control” group of similar firms. The study compared tweets from before and after the hashtag’s trademark approval, analyzing the level of engagement through likes, comments, and tweets, as well as the linguistic content of the tweet, including its emotions, tone, and style.

Based on this study, Kumar and his colleagues discovered some key factors of making a trademarked hashtag work for a company:

1. Companies that trademark hashtags have higher social media engagement.

This study is the first to identify that trademarking hashtags can improve firms’ engagement with its audiences on social media—though the effects have varying levels of intensity for different types of firms and social strategies. “Trademarking a hashtag can increase the number of retweets by 27 percent,” says Kumar, “which is a considerable amount.”

Yet firms can not trademark hashtags arbitrarily. The U.S. Patent and Trademark Office treats hashtags like any other trademark: in order to be approved, the company needs to prove that the hashtag is a key part of the firm’s identity and that trademarking works in the consumers’ favor by preventing or reducing confusion.

2. Trademarking hashtags works better for smaller, less popular companies with fewer Twitter followers.

While the study demonstrates that trademarking increases social media engagement, Kumar and his colleagues investigated how this effect varies among different types of firms. After comparing the companies in the top and bottom percentiles in terms of Twitter followers, the researchers found that firms with fewer Twitter followers had more significant increases in their engagement after trademarking hashtags than companies with larger followings.

Kumar hypothesizes that small companies see larger positive effects because fewer consumers are aware of their brands and products. “Without trademark protection, other competitors can easily use similar hashtags to mislead consumers,” he says. “In contrast, for popular firms with more Twitter followers, it is more difficult to mislead consumers, even in the absence of trademark protections.”

3. Writing styles are more important to firms that use trademarked hashtags.

The researchers also studied how companies used language in their social media strategies to understand the key drivers that cause trademarking hashtags to increase engagement. “This is based on the assumption that the way that people use words reflect how they think,” says Kumar. For example, using pronouns can reflect a self-centered focus, or using prepositions and conjunctions can indicate more nuanced thinking.

The study found that when hashtags are trademarked, a firm’s writing style becomes more important to its social media engagement. “People tend to like a more narrative and informal writing style in tweets,” Kumar says. The researchers saw that more positive, colloquial, and confident writing increase retweeting by up to 10 percent.

4. Effects of increased social media engagement last longer when hashtags are trademarked.

Recognizing that trademarking is a lengthy and expensive process, the researchers sought to discover whether the increased engagement lasted in the long term.

“Before trademarking hashtags, writing more tweets with desirable linguistic styles has only a contemporaneous effect,” says Kumar, meaning that the tweets’ increase in engagement was immediate, but dropped off quickly. After one month, it was no longer significant. “Trademarking hashtags makes things different,” Kumar says. After trademarking, the researchers found that the effects of increased engagement were still happening a month later.

Based on their research, Kumar and his colleagues believe that, especially for smaller companies with fewer followers, trademarking their intellectual social property, like hashtags, is a worthwhile investment. However, to get the maximum bang for your buck, Kumar suggests that companies consider the longevity of their chosen hashtag.

Social media can be fleeting, so invest wisely.

This story was originally published in On the Verge, the Fox School’s flagship research magazine. For more stories, visit www.fox.temple.edu/ontheverge.