Google Adwords Ad Automator: The Next Big Thing - The AdWords system...
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The AdWords system then generates ads from the content in your data feed (or from information you submit through the AdWords interface). This means that you can either let Google create your ad copy for you or you can set it yourself. It then continually analyzes all search queries to see whether they're relevant to any of your products. When it finds a relevant match, it shows your ads on the search page results.
Once setup, you can set daily campaign budget much like a normal adwords campaign. The CPC is set in one of three places. You can either specify your maximum CPC in the data feed, in the AdWords interface, or you can allow Google to determine it for you. The later method automatically sets your max CPC by using the average CPC of the competing ads. As with normal AdWords campaigns, you can have your ads displayed on both the Search Network or the Content Network, and geo-target them.
Some benefits of Ad Automator are that ads are dynamically targeted to queries. They are also automatically compliant with AdWords policies; once your data feed is approved, ads don't need to be reviewed again. You don't need to create new ad text. You can leverage existing product descriptions that are likely already on your website. (However, you may submit customized ad text in your data feed or through the AdWords interface if you like.) You can supplement existing marketing efforts without much additional effort.
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