Automatic matching uses Google’s language processing capabilities to identify other keywords associated with the account, based on their analysis of the current keywords, ads and landing pages. The advertisers ads will then be shown for these keywords as well, even though they are not actually listed among the advertiser’s target keywords.

Keywords queried on Google and the Search Network will triggered ads through automatic matching. The new system will not affect ad delivery on the content network.
Cost per click for automatic matched keywords will approximately match the Ad Group’s current average CPC. Traffic delivered through automatic matching will not affect the Quality Score.

Advertisers can view the exact keyword queries that triggered their ads by running a Search Query Performance report in the AdWords reporting centre.

The new system has come under a lot of criticism since it went into expanded beta in May 2008. The main criticism being that Google is once again trying to make advertisers spend more money in ways that they’re not clearly aware of. While the feature requires users to opt in, not all AdWords advertisers are savvy enough to understand what it could imply and how they can keep track of which keywords are triggering their ads.