The search terms report is the list of the actual phrases people typed into Google before your ad showed, which is not the same as the keywords you chose. Reading it for a few minutes a week is the cheapest way to stop wasting budget. You find the irrelevant searches you are paying for, turn them into negative keywords, and spot the profitable phrases worth bidding on directly.
What is the search terms report?
It is the list of the real phrases people typed into Google right before your ad appeared. Your keywords tell Google roughly what to match; the search terms report shows what it actually matched you to, which is often far broader than you expect. A plumber who bids on "emergency plumber" can quietly end up showing for "plumber salary" or "how to fix a tap yourself." A healthy report mostly reads like things a paying customer would type. A messy one is where your budget leaks.
Where do you find it?
In Google Ads, open the Campaigns or Insights area and look for Search terms. You can view it for the whole account, one campaign, or a single ad group. Set the date range to the last month or so, then sort by cost to see where the money is going first. You do not need to be technical to read it, it is just a list of phrases with the spend and clicks next to each one.
What are you looking for?
Three things. First, irrelevant searches you are paying for: anything with "free," "jobs," "salary," "cheap," or "how to do it myself" is usually someone who will never buy. Second, the winners: phrases that quietly drive your bookings or calls, which may deserve their own ad or keyword. Third, the surprises: searches you never imagined, which tell you how real customers describe what you sell. The first list saves money this week, the other two make you money over time.
What are negative keywords, and how do you use them?
A negative keyword is a phrase you tell Google to never show your ad for. When you find a clearly irrelevant search in the report, you add it as a negative right there, and your ad stops appearing for it. Done regularly, this is most of what "managing" a search account actually is: steadily trimming the searches that waste money so more of your budget reaches the ones that do not. Take a little care not to block phrases that overlap with real customers, but most of the cuts are obvious.
How often should you read it?
About once a week for an active account. New junk search terms appear constantly, and an account nobody prunes slowly pays more for worse traffic. This is check number five in how to tell if your Google Ads are set up badly, and it is the one that is a habit rather than a setting. If the last time anyone touched your account was months ago, this is probably where the waste is hiding.
All writing · Related: How to tell if your Google Ads are set up badly · What conversion tracking is, and why most accounts get it wrong