Ads go through an auction within Google Ads in order to determine their position on the Search Engine Results Page anytime that a search is performed and the Text Ad is eligible to be shown.
The Ad Auction factors in many different variables, from the Quality Score, impact of the extensions in use, the relevance of the website’s landing page, Clickthrough Rate and to how high the bid is for the top position.
Depending on the outcome of the auction, a Text Ad can be shown on the Search Engine Results Page in one of seven ad positions – the top position being regarded as the best.
Advertisers bid on their position within Google Ads and bids can be managed in a number of different ways, including manual and automated bidding strategies.
Source: About the ad auction