Are Google’s Local Service Ads Right for Your Business? A Guide 

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Local Service Ads (LSAs) are pay-per-lead ads that appear at the top of Google search results. Over the past few years, people have been increasingly looking for services and products within their local area. In fact, an estimated 46% of all Google searches mention location.

LSAs can be a significant boost to your local marketing strategy, and may give you a leg up over the competition. Many small businesses use local service ads. However, franchises and multi-location businesses may also find them beneficial. 

We’ll cover all you need to know about Google Local Service Ads from which businesses should use them to how to generate leads. 

Table of contents

  • What Are Local Service Ads?
  • Who Can Use Them? 
  • Local Service Ads vs. Google Ads
  • How to Set Up Google Local Services Ads

What Are Local Service Ads? 

Google Local Service Ads appear at the top of organic search results and traditional PPC ads. These ads work on a pay-per-lead model and are an effective source of high-quality leads and customers.  

The main goal of Google Local Service Ads is to connect your business with people looking for the services you offer. If a customer searches for ‘house cleaner near me’, your local service ad will be displayed on the top spot of SERPs, provided your ad meets Google criteria. (We will look at these criteria in just a minute). But as a quick note, these criteria include background, insurance, and license checks. 

Because they are the first result users see, LSAs can drive significant leads to your business in a short time. Plus, you don’t have to generate any advertising copy when setting them up. Google pulls information from your Google business profile when ranking the ad. 

When a customer clicks on your ad, they see your phone number prominently displayed. If they decide to call or message this number to inquire or book your services, that’s when you pay.  

Each local service ad displays the business name and owner’s headshot, rating, a link to reviews, years in business, and business open hours status. The ad will also have a Google Guarantee or Screened Badge. (More on this later). 

If on mobile, a user sees two local service ads and three if on their desktop. Local service ads can also appear in the map results section. 

When a prospect clicks on the ad, they can look at your rating, past customer reviews, and services. If what you offer matches their needs, prospects can make a call or leave a message. 

Who Can Use Local Service Ads? 

Unfortunately, not every industry or location is eligible to use Google’s local service ads. As of now, the following industries can use them. 

  • Home construction and maintenance
  • Plumbing, roofing, and electrical services
  • Cleaning services
  • Landscaping and lawn care
  • Lawyers 
  • Locksmiths
  • Moving services
  • Carpentry
  • Massage schools
  • Personal trainers
  • Yoga studios
  • Tutoring
  • Pet adoption, boarding, grooming, and training
  • Tax services and financial planning
  • Pest control
  • Real estate

If you’re unsure whether your industry is eligible, Google has a handy eligibility tool. All you need is your state zip code and business category to check your eligibility.

Again, Google Local Service Ads are not available in all locations. However, most locations in large metropolitan regions are eligible for LSAs. 

Local Service Ads vs. Google Ads

Although the goal of both Google Ads and local service ads is to generate leads and customers, there are slight differences. Let’s break down the differences between LSAs and other Google Ads.

Pay-per-Click vs. Pay-per Lead

The biggest difference is that Google ads are pay-per-click (PPC), while Google Local Service Ads are pay-per-lead. 

With PPC, you pay whenever a prospect clicks on your ad. When you use local service ads, you only pay when someone performs an action that classifies them as a lead. 

These four actions qualify your prospect as a lead

  • The customer makes a booking request
  • Customer leaves a message, email, or voicemail
  • The customer calls your business, and you speak with them
  • You miss a call, but return the customer’s call or leave them a voicemail, message, or email

Google only charges you if the lead is valid. If the lead was spam or invalid, you can dispute it. However, it’s up to Google to determine whether to remove the charges.

If Google terms a lead invalid, you receive a credit to your account to compensate for it.

Google might classify a lead as invalid if:

  • The caller tries to sell you a service or seek employment 
  • They called the wrong number
  • It’s a spam call
  • The caller wanted services outside of the locations you’ve listed on your profile
  • The person wanted services that you did not list on your local service ad

Because you only pay for valid leads, Google Local Service Ads can be more cost-effective than typical Google Ads. The lead quality can also be better since most prospects are local and want to buy immediately or in the near future. Google does not explicitly list the cost per lead, but this varies by industry. 

Ad Appearance

Google search campaign ads include copy and descriptions about a product or service. For instance, the ad shows the product or service’s name and a brief description copy of what the product or service solves. 

For example, if you search for real estate agencies on Google, you can see Local Service Ads and Google Ads. 

Typical Google PPC ads look like the below. 

example of a ppc ad

On the other hand, Local Service Ads show the name of the business, years in business, hours, a star rating, and a link to the Google reviews. Sometimes, it will also include an image or headshot of the business owner. This is common for consultants and one-person businesses. 

Google search ads, rely heavily on the copy to compel prospects to click. However, Local Service Ads put reviews front and center.

example of google screened local services ads

Ad Ranking Criteria

With Google search ads, ranking depends on a number of factors from bidding to keyword quality score and search intent. LSA rankings are based on:

  • Your business’s proximity to the customer’s location
  • Number of reviews and the quality score of these reviews
  • Quality of responsiveness to customer requests or inquiries – for instance, constantly missing calls or failing to respond to messages decreases your ranking chances
  • Context of the prospect’s search
  • Business hours – businesses that are open when you search are more likely to rank than ones that are closed

Vetting Process

Before you can post a Local Service Ad, Google vets and screens your business. Typically, it screens your background, license, insurance, and business registration. 

That said, these vetting and screening processes depend on the industry. For instance, an acupuncturist business must undergo an insurance check, while an animal rescue center is not vetted for insurance. 

Google Guaranteed vs. Screened Badge

If a business passes the verification and screening process, it receives either a Guaranteed or Screened Badge. 

Google Screened badges are more typical for white-collar services like real estate and law. Blue-collar services such as house cleaning and plumbing are more likely to have the Guaranteed badge.

example of local services ads

The difference is that if a customer books a service from a Google Guaranteed business but is unsatisfied with the services, Google can reimburse the customer the total cost. 

However, customers who work with a Screened business are not eligible for reimbursement. Google also caps the reimbursement to $2,000 per customer.

Overall, LSAs can be easier to manage than PPC ads. For example, you don’t have to spend a lot of time on keyword research or ad copy. 

Google simply pulls information from your profile about your business’s services, location, phone number, and hours. Conversely, metrics to qualify and rank are more complex for Google Local Service Ads. 

How to Set Up Google Local Services Ads

Here’s a quick walk-through on how you can create Google Local Service Ads. 

1. Check Eligibility 

Remember, not every location and industry is eligible for them, so make sure to first check your eligibility here. You are likely to qualify if you offer services like construction, cleaning, real estate, legal, and so on. 

screen of google local service ad eligibility

2. Create Your Local Service Account

Next, you’ll need to create a local service profile. If you run PPC ads, you need a separate Google Profile Account to run Local Service Ads. 

Creating your Google local ad profile is vital since it determines your ranking and location. First, fill out your business name, location, and contact information. 

Then you need to fill in the services you offer (be sure to list all), your service areas, and opening hours. You’ll also have to fill in the business owner’s name, but this doesn’t show up in the results.

screen of business details for a google local service ad account

After filling out all this information, you’ll see a preview of your ad, and you can make adjustments.

Note, that this profile is different from your Google My Business(GMB) profile. However, Local Service Ads pull reviews from GMB for tracking purposes.

3. Verify Your Business 

After completing your profile, Google redirects you to a business verification page. Typically, you need to provide several documents for Google to verify your business and expertise. 

For instance, a plumbing business will be required to provide its plumbing license. In addition, the business will also have to attach proof of insurance. Verification of insurance and licenses takes about two days. 

Google will also perform a background check on your business and customer-facing employees. Employees and the owner will have to upload their identity card or driver’s license on an app known as Evident to complete the background check. The background check results can take up to three weeks. 

4. Set Your Budget 

Next, you’ll set a weekly budget. The minimum amount is $50, and the maximum amount is at your discretion. Once you set your maximum budget, Google automatically bids on leads for you. 

How much a lead costs will depend on your industry and how much competitors are willing to pay. For instance, if a plumbing company sets a $180 weekly budget, they can expect 7-20 leads depending on how the ad does. 

Note that Google might slightly overspend on a weekly basis, but they never go past your maximum monthly budget.

From there, you can log into your dashboard and start monitoring your leads, messages, and booking requests. You could also opt to use the Google Local Service Ads app to monitor your leads.

You can estimate how much budget you’ll need to spend for your industry, area, and lead goals using this budgeting tool. Going back to our real estate example, you can add your zipcode. In this example, we used Austin, Texas. Then, add your monthly lead goals. According to Google, you’d need to spend $300 to $450 a month to get 10 qualified leads.

sample monthly budget for local service ads

4 Tips for Generating Leads from Local Service Ads

You may have limited control over how your ads rank and how many leads you get each month. However, you can use several optimization tips to increase the ROI of your Local Service Ads.

Work on Your Reviews

Reviews are a big part of whether you rank or not. They are also one of the things prospects look for before deciding to book your services. In fact, to qualify for LSAs, your review rating should be three stars and above.

Typically, Google pulls your reviews from your Google Business profile. So, you want to ensure that you have many quality reviews. After providing a service, ask customers to leave a  review. 

You could also simplify things and share a review link with your customers. Personalize your review requests and make the review process as easy as possible.

Set a Higher Budget

The weekly budget you set for your Google Local Service Ad dictates how many leads you get. To increase your chances of ranking and landing more leads, set a higher budget or weekly bid. 

If you’re unsure of what budget to set, just go with two times what you had in mind. Google will usually not spend the whole monthly budget since the criteria for a prospect to qualify as a lead is pretty top-notch.

Optimize Your Response Time

Responding to leads quickly boosts your rankings and conversion of leads to customers. It’s better to run the Google Local Service Ad when you’re open for business. This way, you can respond to leads in real-time, which boosts your ranking and conversions. Also, running ads when you are actually open results in better ad budget use. 

Multiple Profiles for More than One Target Market

Like any other campaign, you want to streamline your local service campaigns for maximum results. So, if you have more than one business location, set up a local service profile for each area.

If you must use one profile for multiple locations, ensure that each business profile does not target more than three markets. This way you don’t spread your budget too thin, which also reduces the number of leads you get. The true value of LSAs comes in when you dominate a particular market or location. 

Google Local Service Ads are an excellent addition for any business with a local marketing or SEO strategy. These ads are a proven source of quality leads and even direct customers to your business.

If your goal is to increase the number of customers in a particular location, Local Service Ads are a good start. While most common for smaller businesses, LSAs can also work effectively for some companies with multiple locations as an addition to their national and regional marketing.

You can start test-driving them for one location and then expand to other locations when you get the desired ROI. That said, winning local search will take a combination of great local marketing, well-optimized GMB profiles, and Google Ads. Social marketing is also another facet to consider and optimize. 

Get in touch to learn whether Local Service Ads or other ad types are right for your multi-location business.