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We combine the auction-time ad quality (including expected clickthrough rate, ad relevance, and landing page experience), the max. CPC bid, the [Ad Rank thresholds the competitiveness of an auction, the context of the person’s search, and the expected impact of extensions and other ad formats to determine [Ad Rank. When estimating the expected impact of extensions and ad formats, we consider such factors as the relevance, expected clickthrough rates, and the prominence of the extensions or formats on the search results page. Each advertiser’s Ad Rank is then used to determine where the ad appears and what types of extensions and other ad formats will show with the ad (or whether the ad or ad format will appear at all).
For ads on the Search Network, the Ad Rank thresholds (and the resulting Actual CPCs) are typically higher for [ads above search results in order to maintain a high-quality experience and to help ensure that actual CPCs reflect the value of the ads’ prominent location. As a result, the actual CPC when you appear above search results is often higher than the actual CPC if you appear below search results, even if no other advertisers are immediately below you. Although you may pay more per click, top ads usually have higher clickthrough rates and may allow you to show certain ad extensions and other features available only in the top ad slot. As always, you’re never charged more than your max. CPC bid (unless you’re using automated bidding tools).