Google AdWords allows you to measure the effectiveness of your ads in generating more business, and make adjustments accordingly.

You can access reports about the following data to measure and track performance:

• Clicks
  Clicks are the basic measure of success of a Google AdWords ad. It tells you if potential customers are clicking on your ad.
• Impressions
  Impressions measure how many times your ad has been shown, regardless of actual clicks.
• Click-through rate (CTR)
  A measure that shows what percent of the time a potential customer clicks on your ad. It is calculated by dividing the number of clicks your ad receives by the number of times it is shown (impressions). A keyword’s CTR is a strong indicator of its relevance to potential customers.

In Google AdWords, you can find performance information on the Account Snapshot and Campaign Summary page or in the Reports tab, where you can run customisable reports for your campaigns, keywords, ad groups or your entire account.

Additional Tools for Tracking Performance

Along with the Report Centre reports, you can also measure the effectiveness of your campaigns through tools such as conversion tracking and the powerful, free Google Analytics program.

• Conversion Tracking
  Conversion tracking allows you to clearly identify the ads that bring you customers. A ‘conversion’ means turning a click on an ad into a purchase, or other desired activity on your site. It’s converting someone who’s merely searching into a real customer. For example, if someone clicks on a Google AdWords ad and buys something from the advertiser’s website, the click counts as a conversion. Conversion tracking displays the number of conversions and the value per conversion that you receive from your advertising campaigns in your AdWords account statistics.
  Reviewing this information can help you determine the best budget and CPC bids for your advertising goals so that you can maximise your return on investment. You can set up conversion tracking when by going to the ‘Campaign management’ tab in your account and selecting ‘Conversion Tracking.’
• Google Analytics
  We also recommend that you create a free Google Analytics account, if you haven't already done so. Google Analytics is a free web analysis tool that provides detailed conversion data, as well as information about where your site visitors are coming from, how long they stay on your pages, and a wide range of other data that helps paint a portrait of your site usage and visitor behaviour.