If you want to pay less for your adwords campaigns you should keep a close eye on your conversion rates. By tracking your conversion you will gatter important information about your adwords campaign performance thus allowing you to tweak it when needed.
When you sell services and products on your site using adwords campaigns you can know exactly your conversion rates by comparing the total number of visitors coming through the ads to the number of sales you made. This number defines your conversion percentage. When your percentage is low you should tweak your ads, refine your campaigns or even select better keywords to obtain a better rate.
Google provides inside the Adwords application a tool for tracking conversions for each campaign and each ad you run. This allows you to learn what your rates are and see which ads are doing their job well. If one ad or a whole campaign isn't doing well, then you can look for patterns that can clue you in about how to change and make the campaign more effective.
The more data you gather about conversion the better you will be able to tune your site because the fact that a visitor clicks your ad , lands on your site to see what you have to offer does not necessarily makes it a buyer or a lead. Your site colors, navigation and structure also have a very important effect on your conversion rates.
It doesn't matter whether you are the worlds number 1 adwords campaign creator if your site is ugly, difficult to use or navigate or is not offering what you stated in the ad you will have very low conversion rates. A fine example of this is the ad that states that a product or service is free only to find out when you go to the site that you have to pay. Make sure that your ad and your website are offering the same thing with the same conditions.