If you buy keywords on Google AdWords, you'll want to focus your spending on the keywords that drive the highest quality traffic to your site and provide the best return for your business. By looking at a single report in Google Analytics, you can see the ROI for each keyword you buy, spend confidently on the keywords that perform, and drop the ones that don't. Here's how.

Link your AdWords account to your Google Analytics account.

Once you've linked your Google Analytics account to your AdWords account, you'll begin to see your spending for each keyword, as well as other cost metrics, appear in your Google Analytics reports. By linking the accounts, you've basically allowed yourself to compare your keyword spending with what happens after visitors click on your AdWords ads. Behind the scenes, Google Analytics starts importing the clickthrough and spending data from your AdWords account while tracking all the associated visitor activity.

So, if you haven't done so already, link your AdWords account to your Google Analytics account now. It's also a good idea to make sure that autotagging has been automatically enabled (more on autotagging). This allows each click on your AdWords ads to be automatically associated with the appropriate keyword and AdWords campaign.

One additional benefit of linking your accounts is that you can access Google Analytics simply by clicking the Analytics tab in your AdWords account.

Do your goals have values?

Wait! Before you decide to skip this part because you don't sell anything, let me remind you that this is an article on ROI. If your goals don't have values, you won't be able to measure the return on your investment. Your investment is your AdWords spending. So, where does your return come from?

Of course, if you have an e-commerce site, your return comes from your e-commerce revenue. But, even if you don't have an e-commerce site, you can probably come up with intelligent values for your goals. For example, if you know that 1 out of every 100 PDF downloads results in a $500 sale, you can assign a value of $5 to that PDF download.

If you haven't already assigned values to your goals or set up your e-commerce shopping cart to report revenue, there’s a Help Center article to walk you through the steps.

Analyzing AdWords

The report for tracking keyword ROI is the AdWords Campaigns report in the Traffic Sources section. Click one of the Campaigns that are listed in this report to drill down and view the Ad Groups within the Campaign. The AdWords AdGroups report will appear. Within this report, click one of the Ad Groups. The AdWords Keywords report will appear. This report lists the keywords within the Ad Group you selected. Finally, click the Clicks tab to see ROI metrics for the keywords.

If you are not getting any cost data (i.e. if Cost is 0) make sure you've linked to your AdWords account and that you've enabled autotagging. If Revenue is 0, make sure that you've either set goal values or that you've enabled your shopping cart reporting.