You re correct--you can read this data from the cookies.

To configure the tracking:

1. connect your adwords and GA accounts:

2. in your AdWords account, go to My Account > Account Preferences, click the "edit" link next to Tracking then select the box that says "Destination URL Auto-tagging". Click "Save Changes";

3. still from your AdWords account, click the Analytics tab and choose Analytics Settings > Profile Settings > Edit Profile Information; check "Apply Cost Data", then click Save Changes

So how can you tell if it s working? And where does GA store the data?

Grab an initial __utm.gif request and look at the Referer. Appended to the URL is a new parameter "gclid." This is the keyword-specific parameter (unique to your account). It s this parameter that distinguishes your visitors as AdWord-originating (i.e., "google(cpc)") from "google(organic)" Here s one i just grabbed and anonymized (scrambled the numbers/letters):

Referer: http://www.adomainname.com/?gclid=CKr61p31yKACFZlg4wodjj3gbA

You ll see this identical string in two other places in the same tracking pixel request:

(i) as the value for the GIF Request Parameter "utmp" which is the page request for the current page, and, most importantly;

(ii) as the value for the GIF Requests Parameter "utmcc"--the container for the cookies. The specific cookie that holds the adwords data is __utmz, which is actually the container for all referral data. Here s an anonymized example i just grabbed more or less at random (i.e., i just did search in Google using a query comprised of obvious Adwords and then clicked one of the paid links in my search results, then just pulled the Request Header):

utmcc=__utma%3D755416178.1576730350.1269876846.1269143846.1269143846.1%3B%2B__utmz%3D219726107.1269143846.1.1.utmgclid%3CKr61p31yKACFZlg4wodjj3gbA%7Cutmccn%3D(not%2520set)%7Cutmcmd%3D(not%2520set)%7Cutmctr%3Dhomes%2520for%2520sale%3B HTTP/1.1

You could add an additional url parameter to the url you gave at google adwords, and check for it on your site and store in a session variable or cookie.

At registration of a user account check for this session or cookie you have created and act accordingly..

I know this already has an accepted answer but it s very out of date. The updated way can be found here: https://support.google.com/analytics/answer/1033981?hl=en

C+P d:

In order for Analytics to display details about your AdWords keywords and costs, you must do one of the following:

Enable auto-tagging. This is the recommended approach and ensures that you get the most detailed AdWords data. Manually tag all your keyword final URLs with tracking variables. You should only do this in the special cases outlined below.

How auto-tagging works Auto-tagging automatically imports AdWords data into Analytics. Combining AdWords data with the rich post-click information provided by Analytics allows you to see what happened on your site after people clicked on your ads.

When you enable auto-tagging, a parameter called gclid is added to your landing page URL when a user clicks over to your site from an ad. For example, if your site is www.mysite.com, when a user clicks on your ad it appears in the address bar as:

www.mysite.com/?gclid=123xyz

Enable auto-tagging To enable/disable auto-tagging:

Sign in to your AdWords account. Click the gear icon, and select Account settings. Make sure you re on the Preferences tab, and click Edit in the Tracking section. Select (enable) or clear (disable) the Auto-tagging checkbox. Click Save changes.

You could always provide an adwords-specific landing page. That way you have a lot freedom to do whatever you want with the incoming adwords user...