Yes, Adwords conversion tracking is important in my PPC campaign.
The first thing that you need to do before starting any Adwords campaign is to have your Adwords conversion tracking turn ON.
And, secondly is to know what parameter to track in Conversion tracking.
I have seen many people doing PPC campaign especially Adwords, without using the Adwords Conversion Tracking. This is a big mistake to make. Unless you have a third party tool for tracking purpose.
Not knowing what conversion you’re getting in your lead sign up and sales is like sailing a ship without a direction.
I’m not sure why so many people are ignoring the conversion tracking and not using it. It’s not difficult to implement and Adwords has made it seamless to integrate this into your website.
Create a code snippet, and copy into your website, upload and you’re done.
Let me try to explain why conversion tracking is important.
Every Adwords advertiser would have a process / funnel that looks like this.
Ads Impression - Clicks - Leads - Purchase.
Let’s say your ads generate 1,000,000 impressions with a CTR of 2%, you will get 20,000 clicks or visitors to your website.
If you landing page capture 30% of the signup, which is 6,000 and out of that, 3% or 180 purchase your product.
However, knowing this figures in average terms is not enough.
Why? Because you do not know this in terms of your Adgroups and Keywords.
Simply integrate the Adwords conversion tracking into your campaign, you would instantly be able to track conversion by campaign, adgroup and as well as down to every keywords.
With this information, you will have critical information to optimize your campaign.
You could also see this information for your ads copy as well.
Now, what should you track in the conversion? Signup or Purchase? Since Google Adwords only allow one Adwords conversion tracking to be display.
I would recommend tracking signup conversion. Which mean you simply put the Adwords conversion tracking code on the thank you page of your signup form.
Signup process is probably one of the first goal for most advertiser, since they want to build a list and monetize them in the backend. Yes, the money is in the list!
From the above example, signup is 6,000 while purchase is only 180.
By tracking the signup conversion, we would be able to track faster as well as optimize faster. If you would to track purchase, then you are tracking the end of the process which is much slower.
Hence your campaign optimization process could be faster by as much as 33 times by your competitor who track purchase. This put you in much advantage of the competition.
Go ahead and use the Adwords conversion tracking now, it would only take you few minutes.

- Thomas
Resources:
Improvement to Adwords Conversion Tracking
Setting up and using conversion tracking
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adwords conversion tracking
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