The order in which your ad appears on a page in relation to other ads. For example, an ad position of "1" means that your ad has the highest position on the page relative to other ads of the same type. It doesn't necessarily mean that your ad is above the search results. If there are no ads above the search results, then it means that your ad is the first ad shown beneath search results.  

• Ad position is determined by a formula called Ad Rank that gives your ad a score based on your bid, the quality of your ads and landing page, the Ad Rank thresholds, the context of the person's search, and the expected impact of extensions and other ad formats. So even if your competition bids more than you, you can still win a higher position -- at a lower price -- with highly relevant keywords and ads.
• Your Ad Rank is recalculated each time your ad is eligible to appear, so your ad position can fluctuate each time depending on the context of the person's search and the competition among other advertisers at the precise moment of the person's search.
• Ads can appear on the top or bottom of a search results page.

More about ad rank and position
Watch a video about Ad Rank and ad position

* Nguồn: Google