All marketers know the importance of reaching their target market. However, what is just as important is missing, or not reaching, those outside your target market. It seems like simple logic, but accomplishing the two are not always one in the same. When it comes to PPC there are settings to reach your target audience, and negative settings to ensure you avoid those outside your target market.
While keywords make your Ads eligible to be shown for given searches, negative keywords disqualify your ads from being eligible to generate an impression for a search. This is helpful when there are keywords and/or phrases that are unrelated to your products/services, but are similar or overlap with your long-tail keyword phrases. This is a great way to weed out similar but unrelated products/services, and people not in the part of the buying cycle you are targeting. For example, if you are an online retailer of computers, then you might want to consider using product review and price comparison, as well as brands names that you do not carry (i.e. Apple, Dell, etc.) as negative keyword phrases.
If you are advertising on the display network, then you have many more negative settings than just negative keywords. Negative placements allow you to select specific URLs to not show your ads, while negative topics will eliminate an array of websites based upon the content on the site. Finally, negative interest filters out users who have frequently visited sites within the given interest group.
Multiple benefits come from using negative settings. First, fewer impressions shown to people outside your target audience will lead to fewer unwanted clicks. Therefore, whether you are using Cost per 1,000 Impressions (CPM) or Cost per Click (CPC), this results in lowering cost, or at least spending more of your budget on wanted impressions and clicks. Second, more targeted impressions will lead to more clicks. This means a higher Click thru Rate (CTR), which will ultimately lead to better ad positioning and/or cheap CPC. Finally, a greater number of more targeted clicks will lead to more conversions. This will be a great boost to your ROI. With all the benefits, there is no reason not to be negative inside your PPC settings.