Google Local Services Ads: Worth It in 2026?

Google Local Services Ads launched with a simple promise: pay per lead instead of per click, only get charged for calls about services you actually offer, and earn a Google Guarantee badge that builds trust.

That was 2017. The program has changed.

LSA costs have climbed 40% in competitive markets since 2023. Lead quality complaints dominate contractor forums. The dispute process that used to refund bad leads in 48 hours now drags on for weeks. Google keeps expanding which businesses can advertise, diluting what used to feel like an exclusive club. 70% of contractors now use LSAs in most markets, up from just 28% in 2021. That’s significantly more competition for the same homeowner attention.

The question in 2026 isn’t whether LSAs work. They do drive calls. The question is whether the unit economics still make sense for your business.

Current LSA costs by trade

Lead costs vary dramatically by trade and market. Here’s what contractors are actually paying in early 2026:

HVAC: $45-80 per lead in major metros, $28-45 in mid-size markets. Emergency AC calls during summer spike to $100+.

Plumbing: $35-65 per lead. Water heater and drain cleaning queries cost more than general maintenance.

Electrical: $40-75 per lead. Panel upgrades and EV charger installations command premium pricing.

Roofing: $55-90 per lead. Storm damage queries in affected areas can hit $150+ during active weather events.

Garage doors: $25-40 per lead. Lower competition keeps costs manageable in most markets.

These are per-lead costs, meaning you’ve paid whether the lead books or not. At a 30% close rate, an $80 HVAC lead translates to $267 cost per booked job. Add in tire-kickers, wrong numbers, and price shoppers, and actual acquisition costs climb higher.

Compare that to organic leads (free after SEO investment) and referrals (essentially free). LSAs are expensive, but they’re also predictable and scalable in ways organic traffic isn’t.

The lead quality problem

67% of contractors surveyed in 2025 reported LSA lead quality declined over the past 18 months. The complaints are consistent:

More price shoppers calling 3-4 providers to compare quotes. More tire-kickers who aren’t ready to buy. More calls from outside the service area despite geo-targeting. More wrong numbers and misdials.

Some of this is Google’s doing. The company expanded LSAs to include more service categories, which increased competition and noise. They also changed the matching algorithm in ways contractors can’t see, prioritizing factors beyond the simple “budget x proximity x reviews” formula that used to dominate.

But some of it is market reality. Homeowners learned they can get multiple providers to call them with one search. They treat LSAs like a quote comparison tool rather than a serious service request.

The contractors who still get quality leads have figured out screening. They return calls within 5 minutes (first call back wins). They ask qualifying questions upfront instead of booking every estimate. They’ve stopped chasing the tire-kickers.

What the Google Guarantee actually does

The badge matters more than most contractors think. 42% of searchers say they’re more likely to choose a Google Guaranteed provider over a non-badged competitor.

The guarantee covers customers up to $2,000 if they’re dissatisfied with work quality. Google handles the claim process. In practice, claims are rare because customers have to prove the work was substandard and that they tried to resolve it with the contractor first.

However, the landscape shifted in October 2025 when Google replaced the Google Guaranteed and Google Screened badges with a new “Google Verified” badge. The practical impact: the badge often doesn’t appear visibly in search results anymore, reducing its trust-signal value for homeowners scanning the listings. You’re still paying for verification, but the visual payoff is less consistent than it used to be.

For contractors, the badge still functions as third-party credibility. You’ve been background-checked and license-verified by Google. But the visibility reduction means you can’t rely on the badge alone to differentiate your listing.

The downside: getting the badge requires submitting to Google’s verification process, which includes background checks, license verification, and insurance confirmation. The process takes 2-4 weeks and needs to be renewed annually. If your license expires or insurance lapses, you lose the badge and your ads go dark.

The dispute process broke

LSAs used to have a contractor-friendly dispute system. Call wasn’t about a service you offer? Dispute it, get credited within 48 hours. Customer gave a fake number? Same thing.

That system still exists, but response times have ballooned. Contractors report disputes taking 3-4 weeks to resolve in 2026. Some never get resolved at all.

Making it worse, Google discontinued credits for “job type not serviced” and “geo not serviced” leads starting in 2025. You now pay for leads you can’t serve if your category and service area settings aren’t precise. This makes your initial LSA configuration far more important than it used to be.

The frustration compounds because Google’s system for categorizing leads has gotten worse. HVAC contractors get leads for appliance repair. Plumbers get leads for general handyman work. These should be automatic credits, but the dispute process requires documentation and waiting.

Smart contractors now track every lead in a spreadsheet with notes: call duration, what the customer needed, outcome. When disputes happen, they have documentation ready. It helps, but it shouldn’t be necessary.

Where LSAs still make sense

Despite the problems, LSAs remain the highest-intent advertising channel available. Someone searching “plumber near me” and clicking on an LSA result is actively shopping for a plumber right now. That beats Facebook ads, display retargeting, and most content marketing for pure buying intent.

The contractors getting positive ROI from LSAs share a few characteristics:

They answer fast. The LSA results page shows response time estimates. Contractors who answer calls within seconds get prioritized. Those who regularly miss calls or call back hours later get buried.

They optimize for reviews. LSA rankings weight review count and quality heavily. A contractor with 200 five-star reviews ranks above a competitor with 15 reviews, even if the smaller contractor bids more.

They use message leads strategically. LSAs now support message-based leads alongside calls. Message leads cost roughly 50% less than phone call leads, giving you a significant cost advantage. Some contractors find message leads lower quality, but the screening opportunity is valuable because you can qualify before committing to a phone conversation or dispatching a truck.

They track true costs. Knowing your cost per lead isn’t enough. You need cost per booked job, factoring in no-shows, price shoppers, and disputes. Contractors who track this discover some service categories are profitable on LSAs and others are money pits.

Read more about tracking lead sources properly.

The alternative calculus

LSAs are one lead source among many. The question isn’t whether to use them, but what percentage of your marketing budget they deserve.

Consider what else that money could buy:

Google Ads (Search): Higher cost per click, but you control the keywords exactly. LSAs match you to Google’s interpretation of the query.

SEO investment: Takes longer to pay off, but organic rankings in the Map Pack cost nothing per click once you’re there. Many contractors rank in LSAs and organic results, doubling their visibility.

Direct mail: Lower intent than search, but postcard marketing ROI can beat LSAs when targeting past customers or warm lists.

Referral programs: A $50 referral bonus to past customers costs less than most LSA leads and brings in pre-qualified prospects.

The contractors with the healthiest businesses don’t depend on any single channel. They spread budget across LSAs, organic search, direct mail, and referral systems. When one channel gets expensive or degrades in quality, they shift budget elsewhere.

Gaming the algorithm

Google’s official documentation says LSA rankings depend on reviews, responsiveness, proximity to the searcher, and bid amount. Unofficial testing suggests a few additional factors:

Response rate matters more than they admit. Contractors who answer 95%+ of LSA calls rank higher than those at 70%. The algorithm punishes missed calls. Google now transcribes and analyzes every LSA call with AI to evaluate lead quality and your responsiveness. How you handle the call, not just whether you answer, directly affects your ranking.

Business hours affect visibility. LSAs favor contractors who set extended hours. If you’re available 7am-9pm and competitors are 8am-5pm, you’ll capture more evening queries.

Review recency matters. A steady stream of new reviews outperforms a contractor who got 100 reviews two years ago and stopped asking. The algorithm looks at momentum.

Dispute rate may hurt you. Contractors who dispute 30% of leads reportedly see ranking impacts, though Google hasn’t confirmed this publicly.

The official advice from Google is to answer every call, get more reviews, and expand your hours. The unofficial advice is the same, plus: don’t spam the dispute button and keep your response time under 30 seconds if possible.

Making the call for 2026

LSAs work, but the easy money period is over. The contractors who started in 2018-2019 built review profiles and algorithmic history that newer competitors can’t easily match. They locked in customer relationships during the cheap lead era.

New entrants face steeper costs and more competition. That doesn’t mean LSAs aren’t worth it - just that the bar for positive ROI is higher.

If you’re starting fresh with LSAs in 2026, expect to spend 3-6 months in the red while you accumulate reviews and train the algorithm on your response patterns. Budget for it.

If you’re already on LSAs and costs are climbing, audit your true cost per job (not cost per lead). If you’re above 15-20% of job revenue going to acquisition, the channel is getting stretched.

And regardless of where you stand with LSAs, remember: every lead that comes through has already left someone else’s website without converting. Capturing more of your own website traffic - the 96% who leave without filling out a form - reduces your dependence on expensive pay-per-lead channels.

LSAs are a tool. A good one when used right. But building a business that relies on Google’s pricing staying reasonable is a risk every contractor should hedge against.