Know-How Exchange : SEO/SEM

The most straightforward way to identify negative keywords is to do a Google search on your positive keywords and see what irrelevant results you get. The classic example is Ford. If you're not selling Gerald Ford, you could use the negative keyword President. If you also don't mean shallow crossings of rivers, you could exclude river, stream.

Of course you don't pay for your ad showing in the wrong search result page, but it's certainly a help to the person doing the search to have relevant ads, and if there's any risk that someone would click who is not really your target, then negative keywords can make a significant difference. In the Ford example, that confusion doesn't seem likely. But if you don't want job applicants clicking to you, for a better example, you would have to think through what words are showing in the search results that are associated exclusively with the job-related results, and use those as your negative keywords.
Finally, if you can see some data on who is clicking on your ads (from landing page analytics), you might be able to pick out which ones are not good prospects. Does this help? (I haven't addressed tools, but I would guess most of the ones for positive keywords would have something for negative -- but I don't really recall.)

There is a cost associated with irrelevant keywords as your quality score has influence on your click cost. So, while those keywords aren't costing clicks they are likely costing you more on the clicks you do receive.

There are a number of methods for refining your list but for starters you have enough data to analyze and remove keywords that generate traffic but no conversions.

Understanding your costs is essential to a successful campaign as well. If you don't know your CPA on each keyword that would be a good start. If the CPA pushes you out of profitability you may want to restructure your ad, group, landing page, or ultimately add the term to your negative list.

In the absence of financial data, relevance and user intent are the best measures of the quality of a keyword phrase. Inspect the terms that are being served and eliminate the ones that are not likely to yield results. This is a good first pass until you have the numbers down. You can always roll them back in for limited testing.