In online advertising, a conversion occurs when a click on your ad leads directly to user behavior you deem valuable, such as a purchase, signup, page view, or lead. Google has developed a tool to measure these conversions, and ultimately, help you identify how effective your AdWords ads and keywords are for you.
AdWords Conversion Tracking works by placing a cookie on a user's computer or mobile phone when he or she clicks on one of your AdWords ads. Then, if the user reaches one of your conversion pages, the cookie is connected to your web page. When a match is made, Google records a successful conversion for you. Please note that the cookie Google adds to a user's computer or mobile device when he or she clicks on an ad expires in approximately 30 days. This measure, and the fact that Google uses separate servers for conversion tracking and search results, protects the user's privacy.
Read an example of how AdWords Conversion Tracking works and learn how to set up AdWords Conversion Tracking.
Video: Introduction to ROI explains why it's important to track conversions.
