The use of negative keywords in AdWords is extremely important. If you're not using them yet, I advise you to read on!
Let's begin with an example:
Let's say your client is a plumber in the Toronto area. Your search terms would likely include keywords like residential plumber, local plumber or plumbing services, or simply plumber, which makes sense.
But what if your users searched for plumber jobs, or school to learn plumbing? The keywords jobs & school paired with a variant of plumber would likely trigger your ads and wouldn't be relevant to your campaign. This is where negative keywords come in.
Google says it best: "negative keywords let you exclude search terms from your campaigns (or ad group level) and help you focus on only the keywords that matter to your customers. Better targeting can put your ad in front of interested users and increase your return on investment (ROI)."