Automatic Matching refers to a beta test currently being run by Google.
Basically, when Automatic Match is enabled, Google will spend the remaining funds in your account for you on keywords it deems “relevant” and “conversion friendly”, even if you haven’t specifically requested that they run ads against those queries.
Google defines the option thusly:
Automatic matching is an optional feature that helps your ads reach targeted traffic missed by your keyword lists. It works by analyzing the ads, keywords, and landing pages in your ad group. It then shows your ads on search queries relevant to this information.
Basically, there are two considerations:
First off, be sure to opt out of Automatic Matching. This option allows Google to distribute your spend on keywords without your consent or control.
To opt out of Automatic Matching, first go to your AdWords account, go to the “Campaign Summary” tab and highlight the campaign or campaigns you’d like to opt out of. Then click “edit settings”:
Next, scroll to the “Advanced Options” section of your campaign settings and uncheck the Automatic Matching check box:
Leaving this box unchecked means that you have opted out of AdWords.
We recommend that you retain full control of how your AdWords budget is spent and how your ads match to user search queries.