Before you can analyze and make decisions on individual keywords, make sure you have conversion tracking set-up first in your Google AdWords account. Conversions are specific actions you care about on your website, such as lead submissions, white paper downloads, or most commonly, sales. If you’re not tracking conversions already, enable conversion tracking within your Google Adwords account first. You’ll get a code snippet to be placed on a page that’s usually a confirmation page for a desired action.
Once you’re tracking conversions, review your data regularly and make decisions based on patterns you’re seeing. If a keyword is getting a lot of clicks but few of those clicks are resulting in a conversion, you may want to lower your CPCs or pause that keyword entirely. This will save you $ and allow your PPC budget to be spent on other, more profitable terms. In the example below, I paused a keyword that generated clicks and had a good CTR but resulted in only 1 conversion and a relatively high cost/conversion.