Business Checks

The online search giant says most of its revenue comes from small companies – and it

MOUNTAIN VIEW, Calif. (Fortune Small Business) — Last September, Polly Liu started having serious doubts about her wedding favors company, Beau-coup.com. During the previous six years, Liu, 36, had grown the online-only retailer into a 30-employee, $10-million-a-year operation. But with the economy entering a miserable patch, she wasn’t sure it made sense to stay in a business that catered expensive happy occasions.

Instead of firing staff or cutting product lines, Liu decided to go for broke. She increased her spending on Google (GOOG, Fortune 500)’s AdWords service, which places those targeted text ads that the world’s most popular search engine serves up alongside its results.

Liu had begun using AdWords soon after Google – based down the road from her office in Mountain View, Calif. – released it in 2002. “It really helped us get off the ground,” she says. “I’d always wanted to try it more, but we’d been too busy.”

For the next six months, Liu increased her AdWords spending to more than $25,000 a month, twice its previous level. She bought more search result keywords, such as “tea party favors” and “Las Vegas wedding favors.”

The outcome: Beau-coup’s sales via AdWords doubled in the same period, while the amount Liu pays to bring each customer to the site has dropped by 20%. The company’s overall growth was around 50%. Google, says Liu, is the main reason for the growth. “It’s the only marketing channel we’re putting more money into,” she explains.