You cannot improve your business by simply placing and designing ads. You need to be sure that your ads are converting into sales. This is why you must track everything!

One quote by a corporate mogul that comes to mind goes as follows: "I know that half of my advertising is wasted. The trouble is I don't know which half." This is where ad tracking software comes in.

If you know where your hits are coming from, you can better focus your ad campaign. Consequently, you can concentrate on buying ads that work and abandoning the ones that don't.

Here are 3 important reasons why tracking your online ads is so crucial.

Reason One: To maximize your profit
If you've found an online advertising niche that converts well into sales then you can easily increase your spending in that specific area. If you weren't tracking your conversions then you couldn't do this. You may be forced to increase your advertising across the board, in which case you may be increasing spending in areas that have a low or even negative return on investment.

Reason Two: To save money
You can easily see which streams of advertising are offering a poor return on investment. You have the opportunity to improve in this area or reduce or stop your spending altogether. You'll boost your bottom line as you will no longer be wasting money on useless advertising.

Reason Three: Quickly Expand Your Advertising Campaign
Once you can quickly and easily tell which ads are performing well and which aren't, you can easily expand to new areas of advertising and increase your spending. Not only do you have a positive return on investment already (which makes it easier to increase advertisement spending), but you also have the confidence of knowing that you can quickly and effectively weed out the bad performers from the good ones in any new area you expand to.

You will also want to track where your traffic is coming from. You may get traffic from an e-zine ad, a PPC ad or from a banner ad. One of these sources may bring you a significant amount of traffic while another brings you little or no traffic at all. By tracking every ad and promotion you place, you will find out where to direct your advertising efforts, thereby saving you both time and money.

Only about 1% of your competitors track their traffic sources. By tracking your ads, you will gain an advantage over 99% of your competitors. In my opinion this is the easiest and most effective way to gain a step up on your competition and maximizing your returns.