In this blog post, I would explain in simple terms – the basics of Google AdWords Conversion Tracking and cover what it is, how it works, and why you need it for your online business (as goals).

According to Google, Conversion is defined as an action that’s counted when someone interacts with your ad (for example, clicks a text ad or views a video ad) and then takes an action that you’ve defined as valuable to your business, such as an online purchase or a call to your business from a mobile phone.

Conversion tracking is a powerful tool in Google AdWords that lets you identify how well your advertising campaign is generating leads, sales, downloads, email sign-ups, and other key actions for your business. Generally, data recorded by conversion tracking allows you to recognise which areas of your campaign are performing and not working, so you can optimise your bids, ad text, and keywords accordingly to get the required return on investment.

Google Adwords and Conversion Tracking

Let say you have an ecommerce store and would like to use Google Adwords to drive traffic and revenue. You would be spending most of your marketing budget on clicks on a weekly basis and control your daily spend via your adwords campaign setting right? You let the campaign run for a week and keep checking on your online sales regularly over a period of four weeks. At the end of week four, you do a final analysis of sales online, number of clicks on your ads and how much money you have spent in total. The challenge here is – you have your numbers in place but you don’t have knowledge of how many of these clicks converted into sales on your website.

With Performance marketing, there is an answer to this especially with Google adwords using a free tool called Conversion Tracking. Conversion Tracking allows you to track the return on investment (ROI) of the clicks on your campaign ads, by letting you know if a click has resulted in an action on your website that you deem to be of significant value. Such actions are called ‘conversions’, since they help translate or ‘convert’ a click into a valuable business outcome.

A conversion could consist of one or more of the following below:

  • An online purchase/sale
  • An enquiry or lead submission via your contact form on your website
  • A newsletter sign-up
  • A whitepaper or brochure downloads

Reasons for Track Conversions?

Tracking conversions also allows you to explore in details what’s working in your Google AdWords campaign. With conversion tracking, not only can you track the overall ROI of your clicks, you can also track the following important elements:

  • Specific keywords that lead to a conversion
  • The value of a conversion at a keyword level

Specific keywords that lead to a conversion

This enables you to identify which keywords in your ad campaigns are most precious to you and which are of less value to you. With this information at hand, you can make more informed decisions around the structure of your campaigns and optimise accordingly.

The value of a conversion at a keyword level

After you recognise which keywords lead to a conversion, you can also cross-reference the value or cost of each conversion with the amount spent on clicks for each of those keywords. An example is when you spend £2 on a Keyword for Ad Campaign A and this has resulted in a purchase or sale worth £25. This means you now have valuable data (from your adwords campaign) that allows you to assess the value of that specific keyword over time and this is great news.

The common sense approach to optimise your campaign is assign greater budget to Campaign A that contains similar keywords or start to set up more variations of that keyword in order to explore whether related terms with lower average costs-per-click result in an even greater number of conversions and rate of return.

How Conversion Tracking Works?

The beauty about Conversion Tracking is, it’s a free tool and really easy to set up. This can be done by simply inserting a snippet of code on the landing page that a visitor reaches after they have completed a conversion on your website. This could be for example, ‘Thank you for your order or purchase’ landing page or a page that thanks customers for signing up to your newsletter. Google AdWords supplies this code for you to paste on the relevant pages of your website, and you can get this code as you proceed through the sign-up steps for Conversion Tracking.

An online retailer (Shoes merchant) might want to track purchases of men shoes on their online store. For this reason, the web developer would need to paste a snippet of code onto the page the customer lands on after purchasing a shoe. Ideally, the following below is a typical channel from click to conversion:

  1. Customer clicks on an ad for the online store, following a search on men shoes
  2. After clicked on the ad, the customer browses your website and makes a purchase/sale
  3. With Conversion Tracking installed, this purchase is recorded as a conversion against the relevant keyword ‘men shoes.’

Below is a sample of snippet of code 

Google Conversion Tracking Code

In conclusion, having conversion tracking for your online store or business is crucial in determining how your ad campaign performs. You should be able to analyse where your money is going and how best to invest in the long term to improve your return on investment for campaigns. Without conversion tracking installed on your website you would not be able to track the value of your spending and this is a no-brainer with google adwords as this tool is free!

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