When you first launch a campaign in Adwords, there is a process (automated) whereby Google checks to make sure the destination URL of each ad/keyword is a functioning page (i.e. no 404 or download). Once this occurs, the ads run and you start raking in the cash.
What we have found is that if that page eventually breaks (and they do, many times when adding additional tracking parameters), Google will not necessarily be aware that the ad is going to a non-functioning page. So, your campaign may be driving costly clicks to pages that don’t exist or call your 404 page (another reason to customize that 404). This can be a major issue with online retailers who have thousands of products and are leveraging product pages as landing pages. A product is no longer listed or pulled due to lack of inventory and, without the proper notification to marketing, clicks come…budget spent…un-smiley faces.
There is a great little tool by EasyTools.com call URL Checker that allows you to run check of all of the URLs from an CSV file.
The tool then identifies all of the broken links and you can take appropriate action from there.