How does Search Engine Marketing bidding work?

[btaliat]

I have just read that there is always bidding that will be done while using SEM to generate traffic. From what I read, I learnt this bidding will be done just like an auction, making it necessary to choose the best SEM agent, with competitive low price.

I dont really know this is done effectively. I wish there is someone here that will explain on what I need to know about the SEM bidding. I will be glad if it is contributed in the comment section.