Negative keywords protect your ad from being shown for irrelevant keywords and save your budget from being wasted on unnecessary clicks. Also, broad, phrase and exact match still apply to your negative keywords, so you have control of customizing your negative keywords to protect against irrelevant clicks and searches as well!
For example, your ad shows up for “yellow puppy jackets”, but you don’t sell yellow puppy jackets. Creating a negative keyword on broad match for the word “puppy” will prevent your ad from showing for anything that has to do with pups.
Also, be careful with adding negative keywords because Google automatically sets it to exact match type. Google also tends to not include synonyms, plurals, or variations when adding negative keywords, unlike the four main match types. Unfortunately, you have to manually add negative keywords to all variations of the keyword you don’t want to show for.