Google Local Service Ads are becoming very popular. New features are being rolled out regularly, and new markets are being made available.

A study published by Bright Local several years ago unveiled that:

When LSAs are present, 25.3% of all clicks are on paid results, and when LSAs are absent, this is 14.6%. I think it's safe to assume those numbers have increased in 2024.

Are you exploring the opportunities to connect with new customers in your area?

LSAs are a great way to start advertising a small or mid-sized local business or boosting your existing Google Ads strategy.

Hi, my name is Evan Ernst. I'll share 4 key facts to help you understand how Google Local Services Ads currently work and what it takes to utilize this marketing channel.

1. Not Every Business Qualifies for Local Services Ads

Google's Local Services Ads were launched for home service providers only. At the time of writing, over 70 types of local businesses can show up on top of Google search results, but there are still limitations.

I don't see a point in adding a list here, as things are constantly changing.

To find out whether you're eligible for Local Services Ads, enter your country, state, and zip code and check the list of job categories. Or look at the bottom of Google's support page.

check local services ads eligibility

Another thing you should know is that Local Services ads are only for verified local businesses. That means you must have a verified Google Business profile and a good number of reviews.

You can try it with fewer customer reviews, but if you ask me, it's a waste of time...Unless you have no competitors or they don't utilize Local Service ads.

2. Local Service Ads Charge Per Lead (Not Per Click)

Unlike traditional Google ads, where you pay for clicks (PPC Advertising), Local Services ads charge per lead. Per lead means when people call you, send you a message, or book with you directly if you have a calendar connected.

The Local Services ads app will notify you for every interaction. But the key benefit of this particular pay-per-lead model is that Google's Local Services ad system records the phone calls.

You or the digital marketing agency managing your Google ads can listen to those calls at any time. Then, determine whether a lead is valid and tell Google if they should charge you.

Advertisers only pay if someone makes a meaningful connection with their local business.

And the best part...Now, there is an optional feature called "Direct Business Search." When you turn that on, you won't be charged if the person indicates that they're an existing customer.

google lsa direct business search feature

How Much is the Cost Per Lead on a Local Service Ad?

Similar to the pricing of PPC Google Ads, the cost per lead depends on your industry, location, competition, there is no point in playing the guessing game.

At Ernst Media, we're getting leads for some clients at $10-$12, while for others, each lead costs over $100.

Even Google's estimates are often far from the actual cost. Once we set up, optimize, and run Local Services ads for several weeks, we can see the cost.

When I say that, some of our clients sweat over the potential expenses, and others aren't sure if Google ads work for small businesses in general. It's normal to doubt marketing channels that you haven't used before.

So far, all the businesses we manage PPC campaigns for are very happy with the results they achieved after adding LSAs to their advertising strategy.

3. You Need to Be Actively Involved to Outrank the Competition

To make Google Local Services ads work, you need to do your part.

Get as many customer reviews as possible before and after you start running Google Local Services ads. Make sure you set the business hours, answer all phone calls, and reply to all messages.

Add a few high-quality photos to your Local Service ads profile. This will make your ad stand out and give your potential customers a glimpse of your business (not available for professional service firms).

Pick the job types you perform. Regularly check your leads and make sure you mark them as booked or invalid. Open disputes for the junk ones to save money.

Just don't forget that Google is also a business, and it must make money.

The more leads you mark as invalid, the less your local service ad will show up. Google will naturally prioritize businesses that accept more leads and get more reviews.

4. Local Services Ads Will Start Appearing on Google Maps

At the beginning of the year, Google announced that Local Services ads could appear on Google Maps for mobile iOS users in California. In my opinion, this is a step towards the monetization of Business Profiles.

Here is what that means to you as a business owner.

When you have Local Services ads up and running, they'll add a few more bells and whistles to your Business Profile. When people see Google Guaranteed or Google Screened check marks, they'll recognize you as a reliable service provider.

google guaranteed and google screened are additional trust factors

On the other hand, the lack of Google Guaranteed/Google Screened badge will make people more likely to choose your competitors.

I'm pretty sure Local Services ads will start appearing on all devices and across the country sooner rather than later. This will make LSAs a must-have in any search engine marketing strategy.

When that happens, most businesses that don't pay for ads won't show up in local Google search results...even if they do, they won't get many clicks.

So, Are Local Services Ads Worth It?

Yes, Google's Local Services Ads are definitely worth it. Here are the three main benefits:

  • Your ad can show up on top of search results (above the paid search ads)
  • You connect with your target audience when they need what you offer
  • You only pay for qualified leads that are ready to spend money with you

Although the competition is growing, I'm certain about one thing...a well-optimized Local Services ad profile and budget page deliver excellent results.

LSAs are among the best options for promoting your business on Google.

The Bottom Line

If you already have Google listings that bring you leads, Local Services ads are a great way to scale your business by showing up in more areas.

Signup and setup are very straightforward processes, but staying on top of search results requires effort. I'm talking about budget optimization, disputing leads, tracking your competitors, etc.

My team and I have been helping folks succeed for nearly 20 years.

So, if you need assistance with Local Service ads or anything else related to digital marketing...Don't hesitate to reach out and tell me about your goals and challenges.

work with a boutique digital marketing agency to grow your business