If you’re currently running a Google AdWords campaign without conversion tracking in place, please pause your campaigns for half an hour or so to read this blog and put one of these two options in place. After that, you can unpause your campaigns with the knowledge that you’ll know how well your AdWords program is performing. Running an AdWords program without conversion tracking is like driving a car with a blindfold on – you don’t have a clue where are or where you’re headed. Scary, right? Well, let’s get on with it.

What is Conversion Tracking?

When users arrive on your website (whether from AdWords or another online source), you should have a specific action you’d like for them to complete. In marketer-speak, these are called conversions. For online stores (eCommerce), this is typically an online purchase (a sale). If you’re a service-based business, this is typically the completion of an online form letting you know they’re interested in your services. These will be our focus today. In upcoming blogs, I’ll discuss tracking phone calls as conversions and tracking a variety of actions in Google Analytics.

Conversion Tracking is Critical in Google AdWords

For small businesses, AdWords is often one of the main paid marketing tactics online. Since you’re paying for every click that drives a user to your website, it’s important to know how many of them are converting once they arrive onsite. If you’re spending $500 or $1000 per month on AdWords, you want to know if you’re actually making any money on that advertising spend. Without conversion tracking in place, the best you can do is guess and hope for the best. With conversion tracking, you’ll know how many sales (along with revenue) or online leads you generated and can make more informed decisions to optimize your PPC efforts AND about its role in your overall marketing strategy.

The Two Options for Tracking Conversions in AdWords (As Promised)

There are two ways to track conversions in AdWords. First, you can use the AdWords-provided tracking method where you place AdWords-specific tracking code on the ‘success’ or ‘thank-you’ page of your website (very important that you place it on the page AFTER the user completes the purchase or form!). If the person, at some point, clicked on one of your ads prior to converting, AdWords will track that conversion. And to be specific, the most recent AdWords interaction will take credit for the conversion. (Special Note: If you want to track sales revenue for your conversions, the tracking code will need to be modified. Please check with your ecommerce provider for instructions.)

The second way to track AdWords conversions is to set up a Goal in Google Analytics and import that goal into AdWords. I want to be clear about something:

Whether you’re running AdWords campaigns or not, you SHOULD be tracking conversions in Google Analytics so you understand how your website is performing.

In your Analytics goal, you’ll most likely have a Destination Goal where the success/confirmation page is the destination that indicates goal completion. As with AdWords, there are some steps you’ll want to follow for full ecommerce tracking if that’s relevant to your business. You’ll also need to link your Google Analytics account to AdWords. From there, it’s as easy as 1-2-3:

  1. Under the Tools menu in AdWords, go to Conversions and select Google Analytics in the left-hand navigation
  2. Select the Goal(s) you want to track as Conversions in AdWords by checking the appropriate box
  3. Click the Import button

The Difference Between Google AdWords- and Analytics-Based Conversion Tracking

In addition to what I’ve described above, there’s one critical difference between the two methods that will definitely impact your reporting. AdWords conversion tracking applies credit for the conversion to the last AdWords click while Google Analytics gives credit to the last non-direct click (i.e. the last interaction where the user didn’t type in the URL). In the case of Analytics-based tracking, if any non-direct interaction occurs after the PPC ad click, AdWords will get no credit (in Analytics OR AdWords reports).

The AdWords-based conversion tracking will almost always have a higher conversion volume when compared to the same website & timeframe using Google Analytics conversion tracking. Since AdWords credits the last AdWords click, whenever that may have occurred, AdWords will take credit for conversions where an ad click may have occurred earlier in users conversion path (it doesn’t care if other non-AdWords interactions happened after that) while Analytics would provide that to the most recent (non-direct) interaction.

This doesn’t mean that one method is better than the other. If AdWords is important to your marketing efforts and you want to give it credit (even if the user interacted with your brand through other marketing channels several times after clicking on your ad), use the AdWords method along with Analytics (which you should be using anyway). If you want to only give AdWords credit when it was the last non-direct touch point, use the Analytics method and just import the Goal into AdWords. If you choose the latter, I HIGHLY recommend reviewing the Attribution Model Comparison Tool in Google Analytics regularly to review any cross-channel impact. I’ll be posting a video here in the next couple of weeks to demonstrate how to leverage this great tool!

The Breakdown

Tracking conversions is critical for anyone spending their marketing dollars in Google AdWords. Whether you use the AdWords-specific conversion tracking method (where AdWords takes credit if a user clicked an ad anywhere along the path to converting) or the Analytics Goal import (where AdWords gets credit only if it was the last non-direct interaction), make sure you have tracking in place and understand how your conversion tracking works. If you have questions about this, let me know in the comments below and I’ll do my best to answer them.