Creating Ads is all done in the 'Ad groups' tab.
Along the top you will see several different tabs. To build a template click on the 'Ad templates' tab. Here you choose what will be displayed in each field on the template.
You can always add new templates by clicking on 'new ad template' at the bottom of the screen.
2) Backup templates
If you add dynamic fields to your Microsoft Advertising templates it might happen that the maximum number of characters of some fields is reached. For instance, the maximum length of 'Headline 1' is 30 characters.
To circumvent this you can add 'Backup templates'. These backup templates function as a backup in case fields in primary templates exceed their maximum length. You can use backup templates to ensure that you send correct ads to Microsoft Advertising every time.
When you have finished, click 'save'. See the next article for creating keywords.