You might choose to use preferred layouts for dynamic display ads if your client:
wants to choose the layouts but not the features
doesn’t care if AdWords chooses the layouts and features
wants to choose the layouts and features
wants to choose the features but not the layouts
You can opt for, having layout for display of ads, or only features from AdWords, or have both of them, i.e. features and layout
Explanations:
AdWords automatically choose the layout you prefer. This option helps you to analyze the effectiveness and efficiency of ads in all dynamics, and anticipates the performance of layout according to viewers, area placement and platforms, where those will be displayed.
With preferred layouts, you just need to choose the layouts and features that you want to add. AdWords will use layouts from that pool of selected layouts and use accordingly (not available for retails feeds). Layout has numerous features which include multiple product carousels, crop the images to best fit your ads, star ratings, and more. AdWords can automatically predict the layouts that are likely to perform optimally for the people, placements, and platforms where they’ll show up, which make your dynamic ads even more effective.