Google search is like a matchmaker: it matches people with the web pages they're looking for, both through search results and through ads. That's why Google encourages you to make your ads, keywords, and website as useful to a searcher as possible. We call this relevance: how well your campaign meets a searcher's description of what they're looking for. For example, let’s say someone searches for “digital cameras,” one of your keywords. Your ad would be more relevant if your landing page features digital cameras.
Why it matters
To encourage you to create relevant ad campaigns that accurately represent your products or services, the AdWords pricing system is partly based on relevance. A highly relevant ad, keyword list, and landing page are generally rewarded with a higher position on the page for potentially less money.
People are more likely to click an ad if it's about the exact thing they're looking for, and are more likely to become your customers if they easily find information about it on your website. So people find what they want, and you gain potential customers. Everyone wins!
How it's used
Relevance is part of your Quality Score, an estimate Google uses to measure how relevant your ad, keyword, and website are to a customer. Relevant ads tend to get higher Quality Scores, which can help your ad show more prominently and attract more customers.