Similarly to Smart Pricing, Preferred Cost Bidding was implemented by Google in 2007, again with the intention of saving the advertiser time whilst helping to achieve advertising goals more consistently.
Instead of setting a maximum CPC or CPM bid, you can set a preferred CPC or CPM bid that represents the average price that you want to pay.
Effectively, instead of monitoring your own accounts regularly and adjusting prices yourself, you give Google complete control over your ads bid price and CPC.