AdWords itself allows many different inputs regarding PPC conversion tracking through the AdWords Conversion Module. It’s possible to import both goal completions and Ecommerce tracked sales from Google Analytics into AdWords as conversions.
For these Analytics inputs to be properly attributed, it’s critical that these traffic sources are properly tagged. Instead of using imported conversions data from Analytics, AdWords conversion scripts can also be used directly. There are advantages and disadvantages of each. Determining whether Analytics conversion data or AdWords scripts work best is a case-by-case decision.
To determine which method works best for your needs, please compare tracking methods in the Google help files. The choice isn’t so simple as “AdWords script” or “Analytics data,” because different types of conversions (sale, signup) may require a hybrid approach. Mistakes made in your tracking strategy selection will result in either over counting or under counting the business impact of your paid search efforts (as well as your email and other channel efforts).
When auditing new clients, we’ve seen both extremes: 1) duplicate conversion reporting leading to excessive spending, and 2) misconfigured conversion reporting leading to under funded reach.
PPC optimization is difficult in itself, outside of having proper tracking – but layering in poor tracking (via untagged links or improper conversion inputs) makes optimization of your ad spend literally impossible. But if you plan, test and implement your traffic and conversion tracking properly, you can use your ad spend to its fullest, maximizing your profits, and gaining a reach advantage over your competition.