In this guide to Google Local Services Ads, Gevelopers explains what LSAs are, how they work, and everything else you need to know about the increasingly popular paid option.
What are Local Services Ads?
Local Services Ads (also known as Google Local Services Ads) are pay-per-lead ads that appear at the top of the search results, above organic results and traditional Google Ads. To be included, a business must first pass a screening process that involves background checks, license checks, and insurance checks. The specific checks will vary depending on the business type and where they are located.
Here’s how Local Services Ads might look in desktop search results:
Meanwhile, here’s an example I’ve sourced from a mobile search:
Where do Local Services Ads appear?
Local Services Ads appear at the top of the search results, above organic results and traditional Google Ads.
The user is presented with three ads on desktop and two ads on mobile. At the bottom of the ad unit, the user can click or tap to view additional ads for businesses.
The number of ads in a market and within specific categories can vary quite a bit. You might see only a few or you might see dozens. It just depends on how many businesses are in the category in that market. The most ads I’ve seen after clicking through to view the entire list for a specific search is 100, so that may be the maximum.
This is what you’ll be presented with if you choose to expand the ad unit on desktop:
When do Local Services Ads appear in the search results?
The ads may appear for search queries relating to certain business types including several categories of home services businesses, financial planners, certain lawyer types, and real estate agents.
Here are some examples of different business types results:
Real estate agent
Which countries are eligible to participate in Local Services Ads?
After initially appearing in only a few cities in the United States, Local Services Ads eventually expanded nationwide in the US and into Canada. In September 2020, Local Services Ads become available for select business categories in several additional countries, including Austria, Belgium, France, Germany, Ireland, Italy, Spain, Switzerland, and the United Kingdom.
Which business types can participate in Local Services Ads?
In the United States, the following business types are eligible to sign up for Local Services Ads:
Business Types Eligible for LSAs (USA)
Water damage services
Businesses in Austria, Belgium, Canada, France, Germany, Ireland, Italy, Spain, Switzerland, and the United Kingdom are now eligible to participate in Local Services Ads in the following categories:
What is the difference between Google Guaranteed and Google Screened?
In addition to prime placement in the search results, Local Services Ads have labels that help them stand out: Google Guaranteed and Google Screened.
The Google Guarantee means a business has passed the screening and qualification process and that Google will back the work of the business. If a customer that booked service via a Local Services Ad is not satisfied with the quality of the work, Google might reimburse the customer up to the amount they paid for the service (with a lifetime cap per customer of $2,000 in the United States).
The Google Screened designation indicates the business has also passed the necessary screening and qualification process but is not backed by the guarantee.
Whether a business is Google Guaranteed or Google Screened comes down to the business type. You will not see Google Guaranteed and Google Screened Local Services Ads in the same result because they apply to different business categories: ‘home services’ (Google Guaranteed) and ‘professional services’ (Google Screened).
Examples of ‘home services’ businesses include plumbers, locksmiths, electricians while ‘professional services’ include lawyers, real estate agents, and financial planners. Only businesses that provide professional services including law, financial planning, and real estate are eligible for the Google Screened badge. These categories are currently only available in the US.
Local Services Ads FAQ
In the following sections, we’ll take a look at some commonly asked questions surrounding Google Local Services Ads.
Are LSAs worth it?
Absolutely. There’s no cost to sign up or obligation to participate.
The onboarding process can be quite cumbersome, but once enrolled, a company will be able to objectively determine whether it’s a good fit for their business. If they determine it’s not, they can pause the ad and no longer incur Google Local Service Ads costs. Their listing will simply be placed among the free listings in a section below the paid listings, although Google may eventually remove them after a long period of inactivity.
Additionally, LSAs offer several fringe benefits:
- Recorded phone calls (US and Canada)
- Ability to dispute charged leads (US and Canada)
- You only pay for the leads
- Low lead costs (this will vary by business type and region)
- Easy to manage
What type of leads will I get?
There are a few different types of leads you can expect to bring in from LSAs:
- Phone calls — by far the most common and supported in all regions.
- Message leads — if enabled by the business, a user can fill out a form directly from the ad to initiate communication with the business. This is available in select verticals in the US only.
- Bookings — powered by the Reserve with Google platform, this enables the ability for users to schedule their service online. This is currently only available in the US and is limited to Home Service verticals such as HVAC, Plumbing and Electrical for contractors utilizing Service Titan or Housecall Pro.
What are the ranking factors of Local Services Ads?
Placement within the ad unit is based on several factors. Google provides the following information about some of the factors they use:
- Your verification status and whether you obtained a Google badge of trust (Screened — U.S. only — or Guaranteed) or not
- The context of the person’s search. When calculating rankings we look at the search terms the person has entered, the time of the search, and other user signals and attributes.
- Your review score and the number of reviews you receive.
- Your responsiveness to customer inquiries and requests.
- Your proximity to potential customers’ locations.
- Your business hours.
- Whether or not we’ve received serious or repeated complaints about your business.
We believe the ranking factors have evolved over the past few years but a comment I made back in 2018 I think is still as relevant as ever:
Companies that benefit the most from this ad format will most likely be those that are able to maintain a high relative review rating combined with strong brand awareness in their local markets.
I would also add that the businesses that are the most responsive to customer inquiries will have an advantage. Make sure your ad is not running during times when calls may not be answered. The platform does allow you to set an ad schedule so you can easily specify whether you want your ad to run all day, only during business hours, or can choose custom hours.
How much do Local Services Ads leads cost?
Cost per lead will vary depending on several factors, including business type and location. I’ve seen leads costs as low as $5 in the past for locksmiths in some markets while leads for lawyers can be over $200.
Leads used to have a fixed cost which meant a business would be charged the same amount per lead as their competitors. This began to change in September 2020 as Google started rolling out the bid mode option. The previous fixed rate then became the minimum cost per lead.
Now, businesses can choose if they are willing to pay a higher amount per lead. If so, they can set a high maximum amount, potentially improving their position in the ad results. The maximum bid amount a business can select is typically 2.5x the minimum bid, so it is capped. Additionally, instead of picking a specific amount per lead, a business has the option to choose “Maximize leads”, which Google recommends. This option lets Google set the bid to supposedly get the most leads for your set budget.
What happens if you pause your Local Services Ads?
When a participating business has its ad paused, it doesn’t remove its ad (which I also refer to as ‘listing’) from the search results, but the business’s Google Guaranteed or Google Screened label will not be present. Placement is also impacted as the paused listing will appear below paid listings.
It is easy for a business to pause and reactivate their ad via the Google Local Services dashboard or app, and businesses are not charged for leads while their ad is paused.
Can you choose which keywords to target with Local Services Ads?
No. Businesses are not able to designate which keywords to target. Instead, they select categories or “job types” that indicate the type of services and products they offer. Google decides which keywords are relevant for those job types and a business’s ad will appear based upon the service areas and job types the company selected. Google does not provide any keyword data to show which keywords are triggering ads, or which keywords are generating leads.
Can businesses control what appears on Local Services Ads?
Only to a very limited extent. These are not like traditional Google Ads where you have control over ad copy. The appearance of Local Services Ads contains very little information in the initial search result. Business name, review rating, and whether the business is currently open or not will be present. The ad may also show if the business serves your area or how many years they have been in business. Google Screened ads may also include a headshot photo.
Clicking on an ad will take you to a detailed view with more information about the business and photos, but you will not see a business description or “hyped-up” ad copy written by the business. Google is looking to keep it simple by trying to only show factual information about the business without any fluff.
What can you control in Local Services Ads?
The Google Local Services Ads dashboard and app aim to keep it simple for businesses. There aren’t a lot of controls or overwhelming elements to decipher. Some of the main pieces include:
- Selecting the services or ‘job types’ you offer from a predefined list based on your category
- Selecting your service area
- Adding photos to your listing
- Selecting ‘highlights’ from a predefined list (Locally-owned & operated, emergency service, etc.)
- Setting a weekly budget amount and bid type
- Selecting business hours and your ad schedule
Will Local Services Ads continue to expand to more business types?
The sudden large expansion of ‘professional services’ and availability of LSAs in several additional countries near the end of 2020 was a big rollout. I was surprised to see so many new categories and locations launch in such a short period of time. The program has been expanding quite a bit since 2017 but not in big chunks like that.
You could speculate that maybe it was too much at once, as Google has actually pulled back since then. There have been a few business types that have recently been removed from the signup form. So they have either been stopped for good or at least their expansion has been put on hold for now. Some of these include:
Air duct cleaner
Some of these business types only saw limited testing while others looked like they would expand to more markets. It’s possible some may come back eventually but it’s a sign that Google is at least dialing things back a little for now.
We know Google has been making a stronger push to monetize local search the past few years.
Google will continue to look for ways to increase its advertiser base. I believe Local Services Ads will continue to be a part of that growth. We have also seen Google testing the waters with things like the option to upgrade Google My Business, where a business can pay $50/month to have the Google Guaranteed badge appear on their Google My Business listing (if they pass the screening process).
While it is still in limited testing and Google has been very quiet about it, I think it’s a sign that Local Services Ads may see more integration with Google My Business going forward.
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