How do Google AdWords Appear on the Top Spot?

Q: what are the conditions that cause AdWords to appear above the regular search results instead of off to the side?

A:I've just stopped by here for a few minutes between other tasks, but I'll give you some headlines. Ads which go to the (one or two) tops spots must:

* be reviewed and approved, and
* meet an additional performance bar that focuses on relevancy - rather than what you're paying

A few nuances:

Ads on the right are positioned by virtue of two factors, measured equally. These factors are Maximum CPC and CTR. Max CPC x CTR = your rank number. And it is your rank number as compared to your competitors rank numbers that determines position.

Ads going to the top, however, weigh CTR (which is a measure of the relevance of your ads to users) more heavily than CPC. And rather than Maximum CPC, it is the actual CPC that matters.

source: SEW Forums