Suppose, I have an ad in the blue spot. I'm an affiliate and link direct to merchant URL. There are other affiliates competing with me to use the same Display URL but I won "the auction" and only my ad is displayed with this Display URL. Below me there are other advertisers with different ads using different displays URLs.
Question: When calculating CPC for my ad, Adwords will use in the formula:
A) Simply the AdRank of the ad running next down from me, as usual.
B) The AdRank of an affiliate's ad (which is not running) that is trying to use the same Display URL as me and whose position in "the auction" is #2 (mine is #1).