Paid search ads on Google are positioned based on their Ad Rank. Ad Rank is determined based on your CPC bid as well as ad relevancy or Quality Score. Ads that have the highest Ad Rank will appear in the highest positions on the page.
What is Quality Score?
You may know about CPC bids, but how is Quality Score determined? Quality Score is a relevancy metric (between 1 -10) that varies based on your bid type, where your ad is showing, and targeting type. A higher Quality Score means that your ad will most likely appear in a higher position on the page, at a lower cost per click. And, a Quality Score is calculated each time your keyword matches a search query so Quality Score can change frequently.
So it is important to keep in mind that the more relevant your ad is to your keyword, the higher position you may be able to achieve for your ad at a much lower cost.