If you are managing a pay-per-click campaign in Google Adwords, you are hopefully doing more than just setting up the campaign and letting it run itself. If you are, it is 100% certain that you are leaving money on the table. Rather, you need to be actively managing the campaign on a regular basis.

Optimizing pay-per-click campaigns is a whole art and science unto itself. There are countless tricks, techniques and strategies for getting the most out of your campaign. Sometimes, it makes sense to learn all of these tricks yourself. Other times, it is best to leave it to a professional PPC campaign manager.

Either way, you will want to make sure the campaign is being optimized properly. But, how can you measure whether this is the case? The most common answer to this question is, “The lower the cost-per-click, the better-optimized the campaign.” Bzzzzzz – sorry, wrong answer! It is not all about cost-per-click, it is all about cost-per-conversion.

As explained in more detail elsewhere in this blog, a conversion is some action taken by the website visitor that the site owner deems desirable. The action could be almost anything, but is typically defined in terms of making a purchase, filling out a web form, or placing a phone call to the number listed on the site.

Once you have defined a conversion action, you need to set up Adwords to track it automatically. Once set up properly, you can login to your account and view your “cost per conversion” data for any given campaign over any given period of time. The key to setting this up is to create a page on your site that comes up after the desired conversion action has happened. For example, if your conversion is defined as a purchase, then you could have a Thank You page pop up on the site. In that page, in the “code” running in the background, you will want to embed a bit of code from Google Adwords. How it works is: when that Thank You page is displayed, it sends a little message to your Adwords campaign, notifying it of the successful conversion and thereby allowing it to calculate how much you had to spend (on average, over a given period of time) to get each such conversion. Pretty cool, eh? Okay, here’s how to set it up:

1. Login to your Adwords account.

2. Go to the green row of tabs at the top and click Reporting, then Conversions.

3. Click “New Conversion.”

4. Give your new conversion a name and select a tracking purpose.

5. If you like, assign an expected revenue value to this conversion (could be an estimate).

6. Click “Save and get code.”

7. Place the code as instructed onto your site on the Thank You page (or whichever relavant page you like).

Now, whenever someone clicks on one of your ads AND completes the conversion action, Adwords will keep track of it.

Managing to conversion is the ONLY way to fly when running an Adwords campaign. Be sure to give it try.