Local Services Ads charge you per lead and sit at the very top of the results page with a Google Verified badge; Google Ads charge you per click and sit below them, but give you full control of keywords, copy, and landing pages. For a contractor under about $1 million in revenue, run Local Services Ads first and add Google Ads once the LSA budget is maxed. Above that, run both and let Google Ads carry the high-ticket services LSAs cannot target.

Both products come from Google, both put you in front of a homeowner who is searching right now, and each bills you in a different way. This page covers how each one charges, where each one shows up, what you control, how lead credits work, what happened to the Google Guaranteed badge, and the budget split we run for clients by company size.

Local Services Ads vs Google Ads at a Glance

Factor Local Services Ads (LSA) Google Ads (Search)
You pay for A valid lead: a call, message, or booking request. A click on your ad, whether or not the person calls.
Position on the page Top of the results, above search ads. Below LSAs, above the map pack and organic.
Trust badge Google Verified badge after screening. None.
Targeting Service category and service area. No keywords. Exact keywords, negatives, schedules, devices, audiences.
Creative control Profile only: photos, reviews, hours, services. Headlines, descriptions, extensions, landing page.
Budget Weekly budget set by how many leads you want. Daily budget per campaign.
Bad-lead protection Invalid leads not charged; low-quality leads credited automatically (US and Canada only); a rate-this-lead survey for the rest. No credits for job types or areas you do not serve, or for health care, tax, and EMEA advertisers. None for bad clicks beyond invalid-traffic filtering.
Eligibility Approved service categories plus license, insurance, and background screening. Any business.
Time to first lead Weeks. Screening comes first. Days.
Management load Low once the profile is built. High. Needs ongoing keyword, bid, and page work.

How Each One Charges You

Local Services Ads: pay per lead

Google's own description: "Only pay when potential customers get in touch through your ads on Local Services Ads." You are charged for each valid lead, and Google counts a lead as a call, a text, an email, a voicemail, a missed call you return, or a booking request. Lead prices "may vary depending on your location, the job type, the type of lead, or your bidding mode," and Google says message leads are typically priced lower than the matching phone lead, though not always.

You set a weekly budget based on how many leads you want. Google can run past that number in a given week, but never past your monthly maximum, which is your weekly budget times the average number of weeks in a month. Google does not charge for leads it judges invalid, and it reassesses charged leads over time and credits the ones that turn out to be low quality; those automatic credits run in the United States and Canada only. You can rate any lead through the feedback survey, and Google says it "may also occasionally credit leads you report as poor quality" that way. Two reasons Google no longer credits: a job type you do not serve and an area you do not serve. Fix your job types and service area instead of expecting a refund.

Google Ads: pay per click

Search ads charge you when someone clicks. The click might turn into a call, a form, or a bounce, and you pay the same either way. In exchange you get everything LSAs withhold: exact keywords, negative keywords to block junk searches, ad copy you write, a landing page you control, and bid rules by time of day and device. A well-run account puts "AC replacement" money on replacement searches and keeps it away from "AC repair" price shoppers. LSAs cannot make that distinction; they match on category and area.

Google Guaranteed vs Google Screened: both are gone

Contractors still search for the difference between the two badges. On October 20, 2025, Google folded Google Guaranteed, Google Screened, and License Verified by Google into one badge called Google Verified, and the green checkmark turned blue. Google then discontinued the money-back guarantee that came with the Guaranteed badge, effective November 7, 2025. Services booked through Local Services Ads before December 7, 2025 stayed eligible for reimbursement, with claims due within 30 days of the job.

Unchanged: you still pass the screening (license, insurance, background check where required) to earn the badge, and Google still shows which verification checks you passed next to your ad. If your website or truck still says "Google Guaranteed," update it.

Where Each One Shows Up

Search "plumber near me" in any decent-size market and the page typically stacks like this: Local Services Ads at the top, then search ads, then the map pack, then organic. Google states LSAs "appear at the top of the page" for verified providers, above standard pay-per-click ads.

That order is the whole argument for running both. A homeowner who scrolls past the LSA row lands on your search ad. A homeowner who scrolls past the ads lands on your map listing. Our LSA setup guide walks through the profile build, and the Google Ads service page covers what a search campaign needs to hold the second spot.

How Google Ranks Your LSA

You cannot buy the top LSA spot with budget alone. Google's ad ranking page leads with two things: your bid, which is "the maximum amount you're willing to pay for a lead," and your likelihood of generating a lead. That second factor breaks into responsiveness ("Missed calls may negatively affect your responsiveness"), search relevance, and profile quality, which Google defines as "Your rating, number of reviews, average response time, use of high-quality images, the verification checks you have completed."

In plain terms: the contractor who answers the phone and has the most recent five-star reviews wins the row. That is why we treat review generation as part of the LSA budget.

Lead Quality vs Lead Volume

LSA leads skew toward homeowners ready to book. The person tapped a phone number next to your star rating and a Verified badge. Google Ads clicks cover the whole spectrum, from "emergency plumber" at 2 a.m. to "how much does a repipe cost" on a Sunday afternoon. Volume is higher. Intent is mixed.

Our own accounts back this up, with the usual caveat that numbers do not transfer across trades:

  • Plumbing. AMN Plumbing in Ormond Beach runs LSAs as its primary paid channel. In its first stretch of paid lead generation it closed 83% of 94 exclusive leads over about 60 days, and booked $130,000 or more in the first 30 days.
  • Tree service. TreesRX in Port Orange runs LSAs and Google Ads together at a blended cost per lead of about $47, with 469 leads in August 2026 and a 5.0 rating on more than 515 Google reviews feeding the LSA rank.

Neither channel sells the same lead to several contractors. The homeowner can still call your competitor, but nobody resells your lead. That alone puts both ahead of any shared-lead platform.

Which One Fits Your Situation

Under $1 million in revenue, no dedicated office staff

Local Services Ads first. Pay per lead, rate the junk so Google's models learn, and spend your time answering the phone instead of managing keywords. Add Google Ads only after LSAs stop delivering more leads for more budget, which happens when you have taken the volume your category and area offer.

$1 million to $3 million, someone answers the phone all day

Both, split about 50/50 to start. LSAs hold the top row for "near me" searches. Google Ads carry the services LSAs cannot single out: system replacements, repipes, roof replacements, crane removals. Move budget toward whichever channel books jobs at the lower cost after 90 days.

Above $3 million, multiple crews, tracked call data

Google Ads heavy, LSAs always on. At this size the search account earns its management cost through keyword control and landing pages built per service. LSAs stay funded to their ceiling because the top row is worth owning at any size.

New to the area, no reviews yet

Google Ads while the LSA screening clears. Screening takes weeks and an LSA with zero reviews starts at the back of the row anyway. Run search ads to book the first jobs, ask every one of them for a review, then switch LSAs on.

Run Both: The Budget Split We Use

The question we get most is not "which one" but "how much of each." The split below is the starting point we use for clients, adjusted after the first 90 days of tracked calls.

Monthly paid budget Local Services Ads Google Ads Why
$1,500 to $2,500 70% 30% LSAs need less management and every dollar buys a lead, not a click.
$2,500 to $5,000 50% 50% Enough search budget to run separate campaigns for your two highest-ticket services.
$5,000 and up To the LSA ceiling The rest LSA volume caps out by category and area. Search scales past it.

Whatever the split, answer every lead inside five minutes. Google ranks your LSA on response time, and a search-ad click that reaches voicemail was money spent for nothing.

We run LSAs and Google Ads for one contractor per trade per market. Your competitor never gets the same playbook.

Check If Your Market Is Available

Frequently Asked Questions

Are Local Services Ads still a thing in 2026?
Yes. Google still runs Local Services Ads at the top of search results for eligible service categories, including plumbing, roofing, tree service, HVAC, and electrical. What changed in late 2025 is the badge: on October 20 Google Guaranteed and Google Screened were replaced by a single Google Verified badge, and on November 7 the money-back guarantee for homeowners was discontinued.
Do you have to pay for Google Local Services Ads?
Yes. Setting up the profile and passing screening costs nothing, but you pay Google for each valid lead: a call, message, or booking request that comes through your ad. Lead prices vary by location, job type, lead type, and bidding mode. You control spend with a weekly budget; invalid and low-quality leads are not charged, and charged leads can be credited automatically in the US and Canada.
LSA vs PPC: which is cheaper for a contractor?
Per lead, Local Services Ads are usually cheaper, because you pay only when a homeowner contacts you and Google does not charge for invalid leads. Per booked job, it depends on your trade and how fast you answer. Google Ads cost more per lead but let you target high-ticket services LSAs cannot single out. Track cost per booked job by channel for 90 days before you decide.
Is $20 a day enough to run LSAs and Google Ads together?
No. $20 a day is about $600 a month, and in our accounts that buys a handful of search clicks and teaches you nothing. Put all of it into Local Services Ads, where $600 buys leads rather than clicks. The floor we set for adding Google Ads on top of a maxed LSA budget is $1,500 a month.
Is Google Guaranteed the same as Google Screened?
They were two badges for different categories: Guaranteed for home services and Screened for professional services. Since October 20, 2025, Google has shown one Google Verified badge for every screened Local Services advertiser. The money-back guarantee that came with Google Guaranteed ended on November 7, 2025; jobs booked before December 7, 2025 stayed eligible for reimbursement claims.
Is there anything better than Google Ads for contractor leads?
Local Services Ads beat Google Ads on cost per lead and position for most small contractors, and a well-reviewed Google Business Profile beats both on cost because the calls are free. The strongest setup runs all three so your company appears in the LSA row, the search ads, and the map pack on the same results page.

Sources checked September 19, 2026: Google's Local Services Ads product page (pay per lead, placement, Google Verified badge, weekly budget); Local Services Help on how leads work, automated lead credits, ad rankings, and the Google Verified badge; Google Business Profile Community notice on the October 2025 badge change. Client figures are from Watson & Co. accounts and apply only to the trade named.