This feature allows you to set the "match type" for your keyword.
There are three kinds of match type: "broad", "phrase", and "exact".
If you set your keywords to "broad match", your ads will be triggered by searches that include your keywords, as well as searches that include synonyms of your keywords, singular and plural forms, and other variants of your keyword. For instance, an ad associated with the keyword "shoes" may be triggered by a search for "tennis shoes", "shoe" or "footwear".
The advantage of broad matching is that it will expose your ads to the highest number of users. The disadvantage is that it is less targeted, so you may find yourself paying for low-quality clicks.
"Phrase match" is slightly more targeted than "broad match". If you set your keywords to "phrase match", your ads will be triggered by searches that include your keywords in the search phrase. For instance, an ad associated with the keyword "shoes" may be triggered by searches for "shoes" and "tennis shoes", but not searches for "footwear" or "shoe".
"Exact match" is the most precise form of targeting. If you set your keyword to "exact match", only searches for exactly that keyword will trigger your ad. For instance, an ad associate with the keyword “tennis shoes” will only be triggered by a search for "tennis shoes", and not searches for "blue tennis shoes", "shoes" or "tennis footwear".
This match type allows you to target customers with great precision, but may greatly reduce your ad's impressions.