Ad Rank is recalculated every time your ad is eligible to appear. It's why the highest bidder doesn't automatically win: a more relevant ad with a better landing page and strong assets can outrank a competitor bidding more. Ad Rank also determines whether your ad qualifies for top-of-page positions at all, since those require meeting minimum thresholds.
Your actual cost per click is tied to Ad Rank as well — you generally pay only what's needed to beat the Ad Rank of the advertiser below you. Improving ad quality therefore lowers costs and raises position at the same time, which is why relevance work often outperforms simply raising bids.
Example
Advertiser A bids $8 with a mediocre ad and a slow page; Advertiser B bids $6 with a highly relevant ad, strong assets, and a fast page — B can win the higher position and still pay less.
How Sloss Digital uses it
We raise Ad Rank through relevance — sharper ads, complete assets, and better landing pages — so clients win position on quality rather than paying more for it.