In PPC a negative keyword is a type of keyword that keeps your ad unseen by certain people searching for a specific phrase.
These keywords are typically very broad search terms that people might enter when looking for something that doesn't apply to your ad, thus costing you more money to expose your ads to people who aren't interested. They might also apply to certain parameters of a product or service that you don't offer, such as services at no cost or samples, making it ideal to put "free" on a list of negative keywords you want to avoid.
Google AdWords makes it easy to list negative keywords and avoid including them in your PPC campaigns.
By developing and incorporating a list of negative keywords in your ad groups, you can make your PPC efforts more efficient, with ads that are only aimed at people who are looking for your specific products or services. You'll be able to avoid showing ads to parties that won't be interested in what you have to offer, streamlining your campaigns.
Ultimately, negative keyword lists will help you save money and experience better ROI from your PPC campaigns simultaneously.