When you have access to conversion data in your reports, you can make smarter online advertising decisions, particularly about what ads and keywords you invest in. Given better data, you can better measure your overall return on investment (ROI) for your AdWords campaigns.
For example, Bob owns an online business that sells eBooks. He knows how many clicks his AdWords campaign gets, but would like to know specifically which keywords are converting to sales. With basic conversion tracking, Bob can get this valuable information. With customized conversion tracking, he can also report the dollar amount of each sale and get the total revenue generated by each of his keywords as compared to the total cost of the keyword.
With conversion statistics, Bob discovers that the keyword "independent eBooks" has a return on investment (ROI) of 500%. Consequently, he optimizes his campaign by increasing the spend on that keyword, thus maximizing his AdWords ROI.