Sure, Adwords is a great tool for any kind of advertiser, from the little fish with a small budget that can really target low cost and specialized keywords squeezing every little bit of clicks they can, to the big white sharks that can afford to buy the all broad terms and live through the stormy seas of low CTRs and sky-high CPCs.

But I'd like to talk about cheap analytics in Adwords. 

How to set it up

Any Adwords advertiser can setup a really quick way to see how clicks are being converted into visits. It is a matter of simply setting up a Google Analytics account. And, best of all, Adwords and analytics data can be viewed with one simple login. 

Let me walk you through the process of setting up analytics inside Adwords:

1. First of all, make sure you already have a Google Analytics account and admin access.
2. That account must have the same login as your Adwords account in order for both to be linked.
3. Important note: if you are tracking more than one domain, make sure you create a profile for each one so that Adwords can distinguish them when it comes to landing pages and such. 
4. Also, make sure your Google analytics code is on every page of your site(s).
5. Go to your Adwords account. Click on the tab "Analytics".
6. Choose "I already have an account..."
7. Select your account.
8. And you are done. You now have analytics for your Adwords account.

I'm sure a Googler could sum up those steps in a 3-step-process (or a 7-step-process), but I prefer to take the long road when explaining stuff :-)

What you can see

If you went with automatic tagging, Adwords tags every URL and therefore analytics recognizes each visitor that comes from your Adwords campaign. This is crucial - without tagging, all visitors would look the same and there would be no way to identify them in your analytics data (I'm lying, actually there are ways, but they're far more difficult and would require expert knowledge of Google analytics, filtering, and such hard things).

When your campaign starts to run, you can start to check your analytics.

Choose "view reports" from your analytics tab in Adwords, then "origins of traffic," and then "Adwords." Depending on your analytics needs, you can see details for each campaign, which ad performs best, or even which keywords are getting through. And you can now analyse how those people that clicked your ads move around in your site. 

KPIs to look for

I like to look at ATOS (Average Time On Site) and page views. But this only scratches the surface. You really need to understand goals in Google Analytics. A goal is an important page you want visitors to reach. 

Oh, and how much am I paying for that word again?

Yeah, you want to know, just click back to "campaign management." You can sometimes forget you are actually still inside your Adwords account. It's easy to see what keyword are "paying off" or what landing pages are working best for you. 

What about other analytics packages?

Other packages have strong points, such as personalized filters, tags, or even custom funnels. Google Analytics can get you started, but you can accomplish the same tasks (and many more) using such programs as Clicktracks or IndexTools. 

But this seamless integration makes it easy for the newbie to have instant access to raw analytics data that he/she can learn to deal with with time. Sure, Google Analytics may not be the best analytics package out there, but it is free. It can be your stepping stone for some bigger, more labour intensive software programs such as the ones I mentioned before. 

Carfeu loves jogging and hunting bears (do the math). As a day job he's the resident SEO/PPC master/apprentice at Search Marketing in Portugal.