If you are using Google Adwords in any serious way you need to be tracking conversions to know if your campaigns are successful. It would be crazy to spend money on advertising and not try and track activity to see if it was producing new sales , leads or customers.
People take their time about things. It is not surprising to know that often people will click on your Google Ad , come to your page and not take the action you want them to take. They read of your content and then off they go to competitor sites.
Hopefully having had a look at you and your competition they decide you are the service provider they will use. Having been to your site already they remember your web address. Now they access your site by going directly to it or via an organic search on your domain name. When there they make the purchase or take the action you wanted them to do in the first place.
Up to this point Google was able to track back 30 days from an ad click to the conversion event on your site. This meant if it took the visitor 31 days after initially clicking on your ad to completing the task you wanted them to make you would not know which ad generated the sale.
For large or complex purchases people may take months to make up their mind. This meant you where unable to track back and see what ad or keyword generated that sale. Bummer.
At last Google has now changed this. You can now configure this time period your self within the range of 7 – 90 days. Better information means better campaign and more sales etc.
Happy days all round.