Every time your ad is eligible to show, AdWords calculates its Ad Rank using your bid amount, components of Quality Score and:

Every time your ad is eligible to show, AdWords calculates its Ad Rank using your bid amount, components of Quality Score and:

The expected impact of extensions and other ad formats
The search ranking of your website
The daily budget you’ve set
Your historical conversion rate

Explanation: A value that’s used to determine your ad position (where ads are shown on a page) and whether your ads will show at all. Ad Rank is calculated using your bid amount, the components of Quality Score (expected clickthrough rate, ad relevance, and landing page experience), and the expected impact of extensions and other ad formats. Read more here

See all AdWords Fundamentals Questions and Answers here.

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