One of the best features of the three major pay per click advertising programs (Google, Yahoo and MSN) is conversion tracking, and every advertiser should use this function for tracking pay per click ad performance.

<h2>What Are Conversions?</h2>
Different types of companies and organizations define conversions as different things — the answer is that it is the ultimate “call to action” for your website. For an ecommerce site, a conversion might be a sale. For a offline retailer, a conversion might be filling out a form to get a coupon or more information. So the definition of conversion will vary based on your company/organization and its needs and goals.

<h2>Setting up Conversion Tracking</h2>
Setting up conversion tracking in Google AdWords is fairly simple and mostly wizard-driven. From the campaign management screen, select the conversion tracking link. Follow the wizard to set up conversion tracking. Google will provide you with conversion tracking code (javascript code) to paste into one of the pages on your website.

No matter what type of conversions you’re tracking, you’ll want to provide the javascript code to your webmaster to place on the first page that occurs after a conversion occurs. For a signup on a website, this might be the “thank you for signing up” page. For an online sale, this might be a receipt page.

Once conversion tracking is activated, you will then see two new columns added to the Campaigns, Ad Groups and Ad Group Detail pages — Conversion Rate and Cost per Conversion. These statistics will help you decide which keywords and ad groups are bringing you the most leads or customers.

Additionally, you can also run reports on your ads to see which advertisements are providing the highest conversion rates. This is very helpful when testing ads to find the most effective message and landing page and improving return on investment.

Tomorrow’s Topic: The Basics of Yahoo! Sponsored Search

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