Google Analytics is the best way to track the performance of your ad groups and keywords. Google authored both Adwords and Analytics and can quickly integrate the two together. Plus, if Adwords makes enhancements or changes, Analytics will change along with it. Third party or custom tracking tools will have a harder time keeping pace with Adwords.

You link to Analytics using your email address Adwords. If you setup your Analytics account under a different email address, simply add your Adwords email as an Analytics administrator.

You should enable the auto-tagging and cost data features when linking Analytics to Adwords.

Auto-Tagging
Auto-tagging allows Analytics to gather information from Adwords. Google will append querystring parameters to Adwords landing page urls. These parameters are just key value pairs that appear after a question mark in a url. The parameter added is the Google click id which is abbreviated gclid. Analytics will recognize this parameter and will use it to integrate Adwords data into your Analytics account. This all done for you when you enable auto-tagging. Auto-tagging should be enabled by default.

One very important side note about auto-tagging is that it generates a unique id for each click. When a consumer clicks your ad, Google process the click and redirects to your landing page. This is how Google records clicks. Some advertisers use third party tools to track Adwords clicks. These tools use the weblogs that record every hit on a page. But a problem arises when a visitor uses the back button on the browser. The weblog will record another hit on the landing page which translates into a click, but Adwords will not (since it didn't go through the Google servers). A similar problem occurs if a visitor uses the refresh button. Shuman Ghosemajumder at Google says this particular problem accounts for a 40% fictitious click count. Many of the Adwords fraud claims arise from this 40% inaccurate count.

When you use auto-tagging, the Google servers append the unique gclid to the url. This querystring parameter will appear in the weblogs. You could then safely count all the weblog hits for a gclid as one Adwords click. This would prevent the fictitious clicks. Should you use a third party Adword tracker now or in the future, please use the auto-tagging feature available in Adwords and Analytics integration.

Cost Data
Cost data allows you view Adwords budget information inside your Analytics account. You can enable it with these steps.

1) Log in to your Adwords account at https://adwords.google.com

2) Click on the Analytics tab.

3) Click on 'Edit Settings.

4) Click the 'Edit' link in the upper-right corner of the 'Main Website Profile Information' box.

5) Check the 'Apply Cost Data' checkbox.

6) Click on the 'Save Changes' button.

Next time we'll discuss two of the reports in Analytics you can use to get additional Adwords data.