The rate Google charges for ads is inversely proportional to click-through rate, so you pay less per click if your click-through rate is higher. In the case of a company bidding to advertise on searches for that company’s own name, it means that the company can win the bid with a lower offer than competitors trying to put ads there. You could say Google is extorting Verizon to pay up to prevent competitors from stealing customers. But regardless, it’s probably a good value proposition for Verizon to participate in the auction, because
competitors would have to overpay to beat them.
That they pay little doesn't matter. What matters is that it's above zero, which is what the clicks would cost without the ad, making them unprofitable.
The competitor argument for running the ad has two problems. The first is that no competitors are bidding for that keyword, and the second is that a competitor would already have to pay a lot to get top of page placement for a keyword they can't put in their ad copy.
Not sure why you think an ad wouldn’t work here. Sometimes customers are willing to switch to a competing product. If you can offer something better or cheaper they might want it. I’ve worked at a company where we at times bought Google ads for both our own product name and competitor’s names and made money.
> Not sure why you think an ad wouldn’t work here.
"no competitors are bidding for that keyword"
That itself is enough to make Verizon's ads unprofitable.
If you think that competitors would bid for the keyword without Verizon's presence, you'll have to explain why because with Verizon's presence, if nobody clicks on it, the cost is zero. There appears to be a gentleman's agreement between the consumer communication companies not to bid on each other's name, and if that's the case, bidding on your own name is flushing money down the toilet.
I've seen the food delivery case, where Blue Apron bids on "Hello Fresh" and offers a better coupon than for people searching for "Blue Apron." That isn't happening here.
