Negative keywords:

Negative keywords are used in keyword advertising to prevent ads from being shown when the search terms contain the negative keywords.
Negative keywords can have a tremendous impact on ROAS by significantly reducing the number of clicks by poor quality leads.

ROAS:

ROAS stands for Return On Advertising Spending and represents the dollars earned per dollars spent on the corresponding advertising. To determine ROAS, divide revenue derived from the ad source by the cost of that ad source. Values less than one indicate that less revenue is generated than is spent on the advertising.

How Negative Keywords Work?

For intance, your website provides paid hosting and you use webhosting as one of your broad keywords, it is important that you specify what keyword phrases do not apply to your hosting services. You can use free hosting as one of the negative keywords. When you do this, nobody searching for free hosting will be able to see your ads and therefore, you reduce the number of click throughs that are not convertible to customers.

If you provide website services but does not offer website design, you should specify it in your negative keywords in case you use website as one of your general keyword terms. This way, no one seeking for website design will land on your website.

Negative keywords give your ads only the most targeted site traffic – and only the traffic that has the potential to be converted to customers. Remember only to be very careful in the choice of negative keywords.