Smart Bidding allows you to stay ahead of your competition. working like an ebay bidding scheme, you are able to enter your top bid for any or all keywords but the bid price will stay at the lowest bid. If an advertiser bids a higher amount then the bid price, but lower than your top bid price, your ad will still be placed in premier position and the out bidded advertiser in seccond possition.

Why does position matter?
when an advertisement is shown on a publishers search engine or website, the furst result in the list will be of the top bidder for that keyword, being first in the list gives you an advantage as it will be the first a visitor to the search engine will see, hence bringing you more direct visitors.

What if I am last?
Even if you are not in the top positions, your advertisement will styill be shown as there is a rotating order which enables all adverts to be displayed. However, the top positioning advertisements will gain from a higher impression rate, hence a potential higher visitor rate.