From November 2007

By Fred Minnick

Richard Sexton loves the Internet. The president of Carolina Rustica only operates one store, but the company still generates upwards of $4 million in revenues annually. That’s because 85 percent of the Concord, N.C.-based store’s sales come via e-commerce.

The premium furniture operation targets interior designers and 35- to 55-year-old women in the upper-income bracket. You won’t find a full-page Carolina Rustica ad in Architecture Digest or a sponsorship at a nearby country club, however. That’s because the company pumps 80 percent of its advertising budget – 10 percent of revenue – into Google AdWords.

The company buys 2,000 to 3,000 relevant keywords and phrases, ranging from brand names like Wesley Allen to specific items like “iron countertop bracket” to broader terms like “table.”

Sexton has used Google AdWords since 2002, and the program has led to millions in online sales. It’s also boosted in-store sales. After seeing a search-engine ad, Sexton says, some customers make the trek to the store.

“I’m amazed at how far people drive to come to our store to see samples,” he says. “AdWords helps us get the exposure that we probably wouldn’t get otherwise.”

Carolina Rustica also buys keywords on Yahoo!, and uses shopping comparison search engines like Price Grabber, Shopzilla and NexTag. These comprise a relatively small chunk of the company’s marketing dollars, however, and Sexton has no plans to transfer earmarked Google monies to other mediums. If anything, Sexton is building his company around Google’s ability to drive e-commerce.

Carolina Rustica is in the process of upgrading its e-commerce platform to be more Web 2.0-friendly and will dedicate more store and warehouse space to accommodate online merchandise. “This new platform will give us a nice bump in sales around the holidays,” Sexton says. “If I’m still breathing by the end [of the launch], we’re going to look at adding a store in Raleigh. The bricks-and-mortar and the website work hand-in-hand.”

Ads add up
Carolina Rustica’s search ads consist of 25 characters below a quick-hitting headline. The company’s creativity is limited by the number of characters within the AdWords console, “so you really have to push yourself to say something that’s different than your competitors and get your message across,” Sexton says. “If you look at the number of characters or words on the AdWords advertisement, they’re all pretty much the same.”

It’s easy to promote free shipping or low prices, he says, “but if you’re advertising a brand name for lighting, [similar] advertisements are on the page. Trying to make that distinction is really one of the biggest challenges if it’s a heavily competitive keyword.”

Sexton’s is an old-school advertising mentality: The more times your brand is seen, the more sales are generated. Even if a potential customer fails to click on the ad, “they’re still seeing CarolinaRustica.com – and that’s the general awareness you want to build up over the long run,” he says.

Emily White, who oversees Google AdWords, says Carolina Rustica has done a nice job refining its campaigns and maintaining constant duration. The furniture store has also been able to track performance using Google Analytic and Check Out, she says.

“They have a full picture of what their customers are doing,” White says. “They’ve been able to do this without a [large] marketing department.”
Small to mid-size businesses are the bread-and-butter of Google’s AdWords multibillion-dollar business, White says, adding that most of the new adopters of AdWords are bricks-and-mortar stores using the web to complement in-store sales.

Some stores are creating separate phone numbers specifically to track off-line sales generated through AdWords. Others are running special promotions through their online ad, offering coupons redeemable online and in-store.

Carolina Rustica also is using AdWords to target local markets. In fact, Sexton has stopped running print and radio ads “for the time being and we’re just putting our money into Google Local Search and targeting consumers within a 200-mile radius.”

AdWords also allows Sexton to see tracking statistics in real time and lets him make changes to a campaign based on previous experience. Those changes go live as soon as he clicks “submit.”

Although Google says it loses $1 billion a year to fraudulent clicks, AdWords continues to thrive; quarterly revenues consistently reach or exceed $2 billion. Meanwhile, Google is enhancing its offerings. In September it launched Google Gadget Ads, a new interactive ad format that is currently in an expanded beta with a select group of AdWords advertisers worldwide.

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