One thing that mystifies a lot of people who engage in ecommerce using Google AdWords as an online marketing tool is why the conversion data (including revenue) reported by AdWords tends to differ so much from the data shown in their Google Analytics account. We recently (like, yesterday) had to explain this to a client, so it seemed like information that would be good to share.
AdWords places a cookie on the user’s computer when they click on an ad so that it can track a conversion back to the ad for reporting. Analytics does the same thing. However, with analytics, if the user visits various other websites or clicks on any other ads, analytics will associate the revenue with the LAST thing the person did. AdWords still reports it all the way back to the ad, even if they have clicked on other ads or done any number of other things. Up to 30 days, at which point the AdWords cookie expires. To put it technically, AdWords uses “first attribution,” whereas Analytics uses “last attribution.”
So in Analytics, some of the revenue generated after a visitor clicked the ad is being reported as coming from another source. In addition, AdWords actually back-dates revenue to the date that the original click occurred, even if the conversion happened the next month. For this reason, the revenue reported by AdWords for a particular month may actually increase if you look at the report at a later date. To see this effect closer, if you log into AdWords and then go to Tools/Conversions, and look at the list of conversions, each one has a little text balloon that you can mouse over that shows you the “last reported conversion date.” If you look at that data some time after the end of the month, you may notice conversions showing up for that month that actually occurred the following month because that is when the click occurred. And that is why the total revenue reported by AdWords for a given month may increase over time. This does not happen in Analytics because it only shows revenue when the conversion actually happens.
As far as total revenue from all sources, it should be a wash. But the revenue and conversions reported by AdWords reflects the actual number of transactions that occurred after someone clicked on an ad in Google.
So there you have it! Mystery solved. Which one is more accurate? If you are most interested strictly in AdWords conversions, go with the AdWords data. But for a more “big picture” view, go with Analytics.