They get paid for during the ad, but my understanding is that it's more insidious than that.
I searched "buy rav4" and the first ad I got was Toyota, but the second I got was VW, "Compare the VW Tiguan."
My understanding is that if Toyota doesn't cough up the money to buy a high placement ad for "Rav4," the VW ad might actually be at the top of the list.
By making the "promoted" search results barely distinguishable from the organic ones (they used to be so distinct, now it's just a little tag that says "Ad" or "Sponsored") Google gets to reap the benefits of a bidding war for direct searches for a product.
Your Google Keyword Account Specialist also recommends you buy your own brand keywords.... and those of your competitors. Just to make sure that people spend the 10-15% percent of their budget on this
Right, but I think that buying an ad for a competitor's product would generally be a fairly low-value opportunity (if you're searching "Rav4" you'd most likely be looking to click on a site related to a Rav4), particularly if ads are clearly demarcated.
But, because ads now look organic, there's an increased chance that someone will click on it, so because of that UI change on Google's part, people now have to spend more on ads.
I'm not sure about the low value. If I'm searching for a Rav4, it probably behooves other makers of small SUV models--or even substitutes like a Suburu Outback--to help plant a seed about the other options out there just in case you're not thinking that way.
I searched "buy rav4" and the first ad I got was Toyota, but the second I got was VW, "Compare the VW Tiguan."
My understanding is that if Toyota doesn't cough up the money to buy a high placement ad for "Rav4," the VW ad might actually be at the top of the list.
By making the "promoted" search results barely distinguishable from the organic ones (they used to be so distinct, now it's just a little tag that says "Ad" or "Sponsored") Google gets to reap the benefits of a bidding war for direct searches for a product.