Ad position refers to the order in which your Text Ad has shown on the Search Engine Results Page.
The position in which your Text Ad was shown corresponds with the number that appears next to it in Google Ads – “1” next to your ad means that it was shown in the first position, “2” the second position, and so on. It is important to note that ad position “1” does not necessarily mean that your ad is going to appear at the top of the page, above the organic results or before any other results that are also present inherently on the search engine results page — results such as a map card or information panel from Google My Business.
Generally, the first ad position is regarded as the best position to place because more users will see your Text Ad in the first position than the second or third positions.
Your ad position after the auction is decided by your ad rank and is, therefore, not solely dependent on your bid – although, this does play a role in determining your ad position.
Ad position can be improved by improving the quality of your Text Ads, improving the quality of your landing page and increasing your bid.
Source: About ad position and ad rank