Conversion tracking is about tracing users from the point where they enter the website to the point where they do or do not convert into leads. With a PPC campaign, it is crucial to know how many visitors come to the site through the PPC adverts, what keywords they use, how many of the visitors convert to leads and which keywords convert the best/the worst. With this information, the advertiser can act accordingly and make some changes to the PPC campaign. For example, the advertiser could remove some of the keywords that are not converting at a desired rate, change the copy of the advertisements to attract better-targeted traffic, or increase/decrease bids.
Conversion tracking can be done in-house, but most advertisers use a third-party application or an application provided by the PPC engine. For example, Google Adwords and Overture provide their customers with a free tool for conversion tracking. There is a range of third-party applications for conversion tracking and PPC management. Examples of such applications include Keyword Max (http://www.keywordmax.com/), ConversionRuler (http://www.conversionruler.com/) and BidRank (http://www.bidrank.com/).