Google AdWords just got a lot more complicated thanks to a new feature called Search Funnels.
Currently, conversions in AdWords are attributed to the last ad someone clicks before making a conversion, masking the fact that many customers perform multiple searches before finally converting. AdWords Search Funnels help you see the full picture by giving you insight into the ads your customers interact with during their shopping process.
The process of tracking only takes into account AdWords ads so it’s far from an ideal solution (ideally this would be done in Analytics, not AdWords) however it’s certainly a big step forwards. Basically when somebody clicks on an advert Google monitors the other searches they perform for 30 days and, in the even that they end up converting on your site, all their searches and clicks where they either saw your advert or clicked on the advert will be reported to you.
Full details here & a good overview here.