Google has announced the launch of Enhanced CPC, a new automated bidding feature in AdWords, aimed at helping users improve ROI on campaigns with manual bidding. It uses the campaign’s historical conversion tracking data to automatically adjust the Max CPC bid based on the likelihood that the ad will convert.

Google says this should lead to more conversions while reducing the overall CPA. Take a look at this video:
 

Google points to the following as examples of what Enhanced CPC can do:

• Adjust your bid depending on how well a particular search or display network partner site in the Google network has converted for you in the past
• Recognize when specific words within a keyword (e.g. ‘kits‘) convert well and adjust your bid when users search on variations of these terms (e.g. ‘model airplane kits for children‘)
• Detect attributes such as the user’s location, language settings, browser, and operating system and analyze how these attributes may impact the likelihood of your ad converting

Conversion tracking must be enabled on you campaigns if you want to use Enhanced CPC. The feature can be found in the "Bidding and Budgeting" section of the settings tab.

For more examples and information on Enhanced CPC, check out this post.