The KW/PL Bid Manager optimizes your bids by using an algorithm to calculate the optimal Max CPC for an individual keyword/placement. the bid is set based on your desired goal as well as other factors such as:
Keyword/Managed Placement Statistics
The KW/PL Bid Management Algorithm looks like this:
Click on the edit icon to set the Keyword/placement management algorithm and follow a few steps
The following detail the steps and reference articles in the 'Help Center' that will teach you how to correctly use this part of the dashboard.