Layout is simply how the elements of the ad are laid out on the page.
Layout elements include copy, artwork, color and spacing (there are more categories, but those are the major areas).
People do read in "Z" formations, but there are others as well. There is the backwards-6 formation, where you keep the reader's eye on the page for as long as possible.
Some of the major layout problems are:
Lack of an easily distinguishable message. Often, people will try to be clever, and the reader will not put forth the effort to understand what the ad is about.
Also, if the ad is too jumbled, or not enough "white space", the reader will not try to figure the ad out.
The art may not go with the message of the ad - for example, if you're creating an ad for senior citizens, you're not going to use 30-something people in the ad.
I'm ni advertising - good luck!!