Conversion tracking and analytics are critical to effectively managing an online marketing campaign. At the minimum, marketers should track online spending and conversion rates to determine whether their campaigns are successful.
 
Sounds simple enough, right?
 
In theory, yes - however, as SEM campaigns continue to grow in complexity and media options expand beyond banner ads and PPC text ads, marketers must understand how every component of the media mix affects their bottom-line. In order to do so, marketers need to develop customized attribution models that effectively track all aspects of their campaign.
 
Analytics Platforms
Your analytics package, or tracking platform is primarily responsible for keeping a running tally of your KPIs (key performance indicators) such as clicks, conversions, impressions, and time-on-site, to name a few.
 
Which conversion-tracking platform should I use?
Most PPC advertisers have opted for the AdWords Conversion Tracking tool (ACT) available directly through the platform, because it’s simple to install and all conversions are tracked within the AdWords interface. By simply copying and pasting a small bit of code, the advertiser sees conversion data tracked alongside their cost data in AdWords. The downside to this tracking method is that it only provides conversion data for your AdWords campaign. So essentially, you are still tracking in a silo, but even this level of tracking is far better than none at all.
 
The other, more robust option, is to track conversions using a third-party analytics tool that allows you to track not only AdWords PPC conversions but also organic conversions and Web referrals across multiple PPC engines. This can be a free solution like Google Analytics or a more expensive, enterprise-level package, like Omniture. Of course, (shameless plug) you may want to take advantage of CCT, Clickable's conversion tracking tool that allows you to track conversions across networks using a single snippet of tracking code.
 
The benefits of using a third-party tool are obvious. While Google offers a serviceable solution in the AdWords Conversion Tracker, it lacks the flexibility and options offered in third-party tools.
 
Calls to Action
Once you have set up your analytics solution, you need to identify your points of conversion. For some advertisers defining a conversion is simple - all their conversions take place online and consist of a new lead, sale, or newsletter signup. The conversion is logged when a user reaches the conventional "thank you” page on the site.
 
But sophisticated marketers have realized the importance of tracking offline conversions (inbound phone-calls) as well. While these conversions may be as - if not more - valuable than traditional online conversions they are next to impossible to track without a unique call tracking strategy.
 
I highly recommend using a unique, track-able phone number for your PPC landing pages. This will allow you to properly attribute sales you generated via paid search. Also, you will be able to determine which networks, ad groups, and keywords (depending on how many phone numbers you choose to deploy) are generating conversions not only online - but over the phone as well. There are a number of call tracking services available to online marketers.
 
Consider the following scenario:
 
This simplified scenario shows how CPA metrics can significantly alter a marketer’s perception of the performance of a campaign and lead to inefficiencies in account management when conversion sources are not attributed properly.

Tony Soric, Clickable SEM Guru

Note: Clickable employees volunteer several hours a week to helping other search marketers succeed. "Clickable Gurus" participate in numerous online search communities to provide straightforward answers to numerous questions, and, each week, one of the gurus posts a search marketing tip to the Clickable Blog.

Don't neglect to mention Google Analytics goal tracking functionality next time. It works across all traffic sources, and is a free tool. And, you are able to import goals into your Google AdWords campaign interface.

Hi Kevin,

Thanks for taking the time to read and comment on my post. I appreciate the tip regarding importing your Google Analytics goals into AdWords Conversion Tracker.

For readers interested in learning more about importing Google Analytics goals into the AdWords platform, check out this article: adwords.blogspot.com/.../import-your-google-analytics-goals-into.html

My post speaks to the fact that AdWords Conversion Tracker on its own ("out of box") is more simplistic and does not offer as many tracking options as other 3rd party analytics platforms and Google Analytics. With that said, I'm trying to encourage PPC marketers to explore more robust analytics options to help them manage their marketing campaigns more effectively.

One of the most important components of an effective search marketing campaign is conversion tracking

Of course everyone should be doing that, but I am afraid that even today a lot of online business are not tracking it, maybe they have google analytics setup with a couple simple goals. But they could do so much more, for example I personally believe that every ecommerce site should be using the conversion funnel feature in google analytics that helps in determining the problematic areas of your shop.