Local Services Ads charge you per lead (a call, message or booking request) and show at the very top of the page with a Google badge, but you have little control over wording or targeting. Regular Google search ads charge per click and give you full control over keywords, ads and landing pages, but take more skill to run well. Many contractors start with Local Services Ads because they're simpler, then add search ads once they can track which clicks turn into paid jobs.
Whichever you choose, the number that matters is not cost per click or cost per lead. It is cost per booked, paid job.
What are Local Services Ads?
Local Services Ads (LSAs) are Google's ad format built specifically for service businesses like plumbers, electricians, HVAC companies, locksmiths, cleaners and many others. They usually appear at the very top of search results for searches like "plumber near me", above the regular ads and the map.
Key features:
- You pay per lead, not per click. A lead is typically a phone call, message or booking request that comes through the ad.
- A trust badge. To run them, your business goes through Google's screening, which can include background checks, license checks and proof of insurance depending on your trade and location. Approved businesses show a badge such as "Google Screened" or "Google Guaranteed".
- Limited control. You choose your service types, service area, hours and budget. Google decides who sees your ad and in what order. There are no keywords to pick and no ad text to write.
Availability, badge names and screening requirements vary by country, city and trade, and Google changes them from time to time, so check the current rules for your category.
What are regular Google search ads?
Google Ads search campaigns are the classic text ads labeled "Sponsored" that appear above and below the organic results.
Key features:
- You pay per click, whether or not the person calls.
- You choose keywords, such as "tankless water heater installation", and negative keywords to block searches you don't want, like "jobs" or "DIY".
- You write the ads and choose where they send people, like a specific service page or your booking page.
- You set locations, schedules and bids, down to showing ads only in certain ZIP codes during business hours.
That control is powerful, and it is also where money gets wasted. A campaign with broad keywords and no negative keywords can spend a lot on clicks from people who were never going to hire you.
How do they compare side by side?
| Local Services Ads | Google search ads | |
|---|---|---|
| You pay for | Leads (calls, messages, bookings) | Clicks |
| Placement | Usually the very top of results | Top and bottom of results |
| Trust badge | Yes, after screening | No |
| Control over targeting | Service types and area | Keywords, locations, times, devices |
| Ad wording | Generated by Google from your profile | Written by you |
| Setup effort | Moderate (screening paperwork) | Low to start, high to do well |
| Ongoing effort | Answer leads fast, manage reviews and disputes | Keywords, negatives, ads, bids, landing pages |
| Best for | Urgent, common services | Specific, high-value jobs and services LSAs don't cover |
How does Google decide whose Local Services Ad shows?
Google doesn't publish an exact formula, but it has said ranking depends on factors like your proximity to the customer, your reviews and rating, how responsive you are to leads, your business hours, and whether there have been serious complaints.
The practical takeaways:
- Answer the phone. Missed calls from LSAs hurt you and waste money. If you can't answer during certain hours, adjust your ad schedule.
- Reply to messages quickly, ideally within minutes during business hours.
- Keep reviews coming in. See how to get more Google reviews.
- Keep your service list accurate so you only get leads for work you do.
What about bad leads on Local Services Ads?
You will get some leads that don't fit: wrong service, outside your area, spam or a sales call. Google has a process for crediting certain invalid leads. The rules for what qualifies and how credits work have changed over time, so check the current policy in your account. Either way, rate and review your leads regularly. It helps you spot patterns, like a service type that attracts poor leads and should be turned off.
How do you work out what a job really costs?
Don't judge either channel on cost per click or cost per lead alone. Work it through to a booked, paid job. Here is a worked example. The numbers are purely illustrative, not typical prices.
Search ads example
- You spend $1,000 in a month.
- Clicks cost you an average of $10, so you get 100 clicks.
- 15 percent of clicks call or book: 15 leads.
- You book 60 percent of leads: 9 jobs.
- Cost per booked job: $1,000 divided by 9, about $111.
Local Services Ads example
- You get 20 leads at an average of $50: $1,000.
- 3 are credited or junk, so 17 real leads.
- You book 55 percent: about 9 jobs.
- Cost per booked job: about $111.
Same spend, same outcome, on paper. Now add the average invoice and the profit on each job. If the 9 search-ad jobs were mostly water heater installs and the 9 LSA jobs were mostly small drain calls, the channels are not equal at all.
Plug in your own numbers. The formula is: ad spend divided by booked jobs, then compare that to the gross profit on those jobs.
Which should you start with?
A rough guide, not a rule:
- Start with Local Services Ads if you offer common, urgent services (no heat, clogged drain, lockout), you can answer the phone reliably, and you don't have time to learn Google Ads.
- Start with search ads if your best jobs are specific and high value (generator installs, sewer line replacement, remodels), LSAs aren't available for your category in your area, or you have someone experienced to run them.
- Run both once you can track leads to paid jobs, and keep the one that makes more profit per dollar.
If you hire an agency, insist that you own the ad accounts and that their report shows booked jobs and revenue, not just clicks and impressions.
What tracking do you need before spending money?
Without tracking, you are guessing. At minimum:
- Record the lead source on every new customer: "Google LSA", "Google Ads", "Google profile", "Referral".
- Use a separate phone number for each ad channel if you can, so calls are counted automatically.
- Tag your website links from ads (UTM tags), so form bookings carry their source.
- Look at revenue by lead source every month.
FAQ
Are Local Services Ads cheaper than Google Ads?
Neither is reliably cheaper. Cost per lead and cost per click vary widely by trade, city and season. Compare them on cost per booked, paid job using your own data.
Do I need a website for Local Services Ads?
LSAs run from a profile Google creates for the ad, so a website isn't strictly required. A good site still helps, because many people check you out before they call.
Can I choose which jobs I get from Local Services Ads?
You can choose which service types and areas you accept, and you can pause the ads. You can't choose keywords or write the ad.
How much should I spend to start?
Start with a budget you can afford to lose while you learn, run it long enough to get meaningful data (usually at least a month), and decide based on booked jobs, not clicks.
How ServFlo helps
ServFlo records where each request and booking came from, including the ad or page it came through, and you can set a lead source on every customer. The reports show revenue by lead source, and the pipeline report shows close rates. With the phone system add-on, you can buy a separate local number for each ad channel and see calls, answered and missed, and booked jobs by source. See reports, customers and CRM and the pricing page.