When someone searches for a product or service ads auction is carried out?

Each time an ad is eligible to appear for a search, it goes through the ad auction. The auction determines whether or not the ad actually shows and in which ad position it will show on the page. … When someone searches, the Google Ads system finds all ads whose keywords match that search.

For More Information Please Refer:
https://support.google.com/google-ads/answer/142918?hl=en
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