Google uses a quality score in its ad auctions to determine ad position based on relevance. The quality score is calculated based on click-through rate, relevancy of ad to search query, and landing page quality. Before quality score, the highest bidder got the top ad spot but actually paid the bid of the lower advertiser. Now, max bid times quality score equals ad rank, with the highest ranking ads getting top spots. This improves users' experience and encourages better ads, benefiting Google, advertisers and users.