Smart CPM is a feature that allows you to take part in the second-price auction. Instead of fix CPM, you can set the maximal available CPM. In case if your CPM wins, you pay $0.001 above the second-highest CPM in the auction.
It is in your best interest to bid the highest amount you are willing to pay, knowing that often you will end up paying less than that amount.
It helps to buy traffic cheaper, depending on the bids of other advertisers.
How does it work?
Advertiser A has a budget of $10.
If he sets up fixed CPM = $1, he can buy 10000 impressions.
If he sets up Smart CPM = $1, and Advertiser B has CPM = $0.8.
The eCPM of the Advertiser A will be $0.801, and he can buy 12484 impressions for the same budget.
In case you have no budget limits, but have CPM restrictions in $1, you may try to increase your Smart CPM to buy more traffic but keep eCPM is up to $1.