Campaign priorities determine your bids according to which rule:
the highest priority campaign will bid, unless a lower priority bid is high enough
if the highest priority campaign is out of budget, the lower priority campaign bids
if the highest priority campaign is out of budget, lower priority budget is added to bids
if you have multiple campaigns with the same bid, the lowest necessary bid will be used
If the highest priority campaign is out of budget, the lower priority campaign bids.
If the campaign with the highest priority runs out of budget, the next lower priority campaign will place the bid. Continuing with the previous example, when the budget for the High priority campaign is used up, the bid from the Medium priority campaign will be used.
Read more here: https://support.google.com/adwords/answer/6275296
Campaign priority is useful when you’re advertising the same product, for the same country, in multiple Shopping campaigns.
This article explains how campaign priority works and how to set it up for your Shopping campaigns.
Before you begin
To use the campaign priority setting, you first need to Create a Shopping campaign.
Remember campaign priority is only important if you have multiple Shopping campaigns that promote the same product.
How it works
When you have the same product in multiple Shopping campaigns, you can determine which campaign should participate in the auction for that product with campaign priority. Your campaigns already have a priority: Low. But you can change this priority to Medium or High. These priorities determine the bid for any product that the campaigns share.