Smart Bidding is Google Ads' family of automated, conversion-based bid strategies, including Target CPA, Target ROAS, Maximize conversions and Maximize conversion value. It sets bids per auction using signals you cannot bid on manually, and it needs conversion data and a calibration window to work.
What it does
Instead of one bid per keyword, Smart Bidding sets a bid for every auction using context you cannot reach manually: device, location, time, browser, remarketing list membership and more. That is its real advantage over manual CPC, and the reason it needs accurate conversion tracking. Feed it a bad conversion action and it will optimize faithfully toward the wrong thing.
What it needs from you
Two things. Clean conversion data, ideally tied to revenue or pipeline rather than raw lead count, and patience through the learning period after changes. Setting an unrealistic target CPA is the most common way advertisers sabotage it, because the target is an instruction about which auctions to enter, not a spending cap.