Ad Group:

An Ad Group describes a set of ads inside a Google Ads Campaign.  Ad Groups exist in Search, Display, and YouTube campaigns.  They allow the user to group ads based on things targeting and bidding. For instance, if you are running ads for potato chips you might want to serve one ad when people search for nacho cheese chips that describes the delicious nacho cheese flavor and the orange residue the chips will leave on fingers, and a different ad for people who search for sour cream and onion chips. And still you might have a third option for boring plain old chips.

Google recommends having at least 3 ads in any ad group.