Google AdWords Auction is the way that Google selects which ads will be displayed when someone types a search term in Google. For example, if you search for “electrician Orlando,” the electrician company in Orlando that has bid the highest for that keyword will display at the top of the page. Electrician companies with the next highest bids will display at the bottom of the first page of Google results.
The quality of the ad also affects which ads Google selects to display. For example, if the words in the ad itself match the search term exactly, Google is more likely to display the ad.