What is the Google Tag Manager?

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You have a website, it's like a shop online. Like a shop, you want to know what is happening on it, how many people are visiting it, how long they are staying, and where they are leaving. You also want to bring people to the website. In shop you would perhaps flyer the surrounding area, online you would put a banner on other websites to draw people to the site. For a shop, you'd put an entry in the yellow pages or a directory, for a website, you make pay for an advertisement in Google's search engine. As the owner you want to know if these advertisements are working and resulting in sales / registrations / or other ways you define success.

On a website, the way that you measure what is happening on the site, and how successful your advertising efforts are, you use a variety of tools like Google Analytics, Google Adwords, DoubeClick. These tools all as you to put a tag, a 'tracking code' on the website in the websites source code. These codes send pieces of information to the website. As each tool has its own tracking code, you can end up with several codes on one site. The tracking codes 'fire' which means they send the information back to the tools.

So this is where Google Tag Manager comes it. Google Tag Manager is a place where you store all of the individual tracking codes and use rules to state when they should fire.

It's basically like a big empty box that sites on your site.  As the page loads or when you interact on the site, it sends a request to a huge database that Google holds online. It will go to the section of the database that holds your accounts information. It will then look at all of the tags in your account and find which ones match the criteria of the action that just happened (like a page load or button click), it will then fire the tags that meet these requirements in the same way that your tracking codes used to fire when directly on the site .

There may be particularly smaller bits of information you want to track, or you want to track elements. Instead of writing code or using advanced tracking code (like Google Analytics events) on the element itself, you can use a small box called a DataLayer to push detailed information through to the Google Tag Manager which can be used to fire tracking codes or to describe information in the tracking code.

So a very basic (and I guess not 100% technically accurate but accurate enough) way of describing a Google Tag Manager is that it is a box that contains all of your websites tracking codes in one place held online that you can use to manage your codes firing.

The advantages of this are that you can amend any of the tracking codes, add, or remove them, without making any amendments directly on the website as you can amend them online in Google Tag Manager's database and just publish your changes as the version Google should use.

source:google.com