What is it?
The Reduce Bids optimization was created using the Rule Engine to help you find expensive keywords and reduce their bids. The keywords suggested are ones with a higher CPA than a keyword would typically have in the campaign, or keywords without conversions but which have still undergone more clicks than normally required to get at least 1 conversion.
You can access the optimization from the Optimizations > For Bids tab, or directly from this link.
How to use it?
The settings for the optimization suggestions take 4 things into consideration:
Bid Reduction Percentage. In the default settings, it's set to 10%.
Expensiveness factor that is to be considered for suggestions. For example, 1.5 times the typical cost.
Lowest allowed bid. In this case, it's set at 0.10.
Highest allowed bid. In this case, it's set at 10.
In other words, the settings define that if a keyword is 1.5 times as expensive as the typical keyword, and its bid ranges from 0.10 to 10, then reduce its bid by 10%.