Google Local Services Ads vs Google Ads for Contractors

Google Local Services Ads charge $40-95 per lead. Google Ads charge $6.55 per click on average.

One sounds cheaper. The math tells a different story.

LSAs guarantee you only pay when someone actually contacts you. Google Ads charge for every click, and 92-95% of clicks leave without converting.

Here’s how to decide which to use—or whether to run both.

How Local Services Ads work

LSAs appear at the very top of search results, above everything else. They show your business name, reviews, and the Google Guaranteed badge.

You only pay when someone calls or messages through the ad. Impressions and wasted clicks cost nothing.

Google verifies your license, insurance, and background checks before awarding the badge. The badge signals trust—click-through rates on badged listings are 210% higher than non-badged.

Control is limited. Google decides when your ad shows based on your services and location.

Leads contact you directly through Google and bypass your website entirely. This is good for conversion but removes remarketing and SEO value.

Cost per lead varies by trade: HVAC runs $45-85, plumbing $40-75, electrical $35-70, and roofing $50-95.

How Google Ads work

Google Ads appear below LSAs but above organic results. You bid on keywords and pay when someone clicks.

Every click costs money, regardless of whether they call. Average CPC for home services is $6.55. Roofing and electrical run higher at $10-13.

You have full control: you write the ad copy, choose keywords, design landing pages, and set budgets by campaign, keyword, and time of day.

Clicks go to your site, which helps SEO, allows retargeting, and lets you capture leads through forms in addition to phone calls.

Conversion rates matter. If your landing page converts at 5% and clicks cost $10, your effective cost per lead is $200. Convert at 20% and it drops to $50.

Google Ads reward skill. Poorly managed campaigns waste money, but well-run campaigns can beat LSA costs.

The real comparison

Factor	Local Services Ads	Google Ads
Pricing	$40-95/lead	$25-200/lead (depends on conversion)
Placement	Top of page	Below LSAs
Trust signal	Google Guaranteed badge	None
Control	Limited	Full
Setup	Simple	Complex
Website traffic	None	Yes
Remarketing	Not possible	Possible

LSAs win for emergency services, simple lead capture, phone-driven businesses, and contractors without time to manage campaigns.

Google Ads win for brand building, remarketing needs, complex service offerings, and contractors with PPC expertise or agency support.

Why mobile matters

76% of local contractor searches happen on mobile. On a phone screen, LSAs dominate the entire above-the-fold view.

By the time someone scrolls to Google Ads, they’ve already seen 2-3 LSA listings with reviews and trust badges. If they’re in a hurry (and emergency service customers always are), they’re calling an LSA before they ever see your Google Ad.

For mobile-heavy traffic, LSAs have a structural advantage.

Lead quality comparison

LSA leads are high intent—actively searching for service and ready to hire now. Google screens invalid leads like spam or wrong area, and you get credit back for unqualified leads.

Google Ads leads have variable intent: some are researching, some are ready. Your landing page qualifies them. There’s no automatic screening and you pay for every click regardless of quality.

LSAs tend to produce hotter leads. Google Ads produce a mix. But Google Ads let you capture people earlier in their research—valuable for high-ticket services where customers compare options.

Cost per customer comparison

Raw cost per lead misses the bigger picture. What matters is cost per booked job.

An LSA example: $70 per lead with 30% lead-to-job conversion equals $233 per customer.

A well-managed Google Ads example: $10 per click, 10% click-to-lead conversion ($100/lead), 25% lead-to-job conversion, $400 per customer.

A poorly managed Google Ads example: $10 per click, 3% click-to-lead conversion ($333/lead), 15% lead-to-job conversion, $2,222 per customer.

The spread is huge. Well-run Google Ads can beat LSAs. Poorly run campaigns burn money.

Using both together

Running both lets you appear twice on the same search result page. The homeowner sees your LSA at the top and your Google Ad below it.

Benefits include increased visibility, capturing different customer types (phone callers via LSA, website visitors via Ads), building remarketing audiences from Google Ads traffic, and hedging against either platform underperforming.

For budget allocation, start with 60% LSA and 40% Google Ads. Track cost per customer from each and shift budget toward what performs.

Most successful contractors run both. LSAs capture the immediate demand. Google Ads build the brand and website traffic that pays off over time.

LSA limitations

LSA leads contact you through Google, so they bypass your site entirely. Retargeting is impossible with these leads.

Messaging is fixed, so every contractor in your category looks similar. Form-preferring customers are lost since LSAs only support calls.

LSA clicks offer zero organic SEO benefit—Google Ads traffic does. Scaling is limited because Google controls how often your ad shows.

Google Ads limitations

The Google Guaranteed seal is unavailable, and some customers specifically filter for Guaranteed providers.

You pay for every click, and poor conversion rates waste budget fast. LSAs always appear above Google Ads, which is a big disadvantage on mobile.

How to start

If you’re new to paid advertising, start with LSAs. Simple setup, predictable costs, high-intent leads. Get the Google Guaranteed badge, run for 60 days, and see what your cost per customer looks like.

If you already run Google Ads, add LSAs. They capture different positions on the page and your cost per customer from combined sources will likely drop.

If budget is limited, pick based on your business model. Phone-driven and emergency-focused with no time to manage campaigns? LSAs. Building a brand with a great website and want remarketing? Google Ads.

If budget is strong, run both. Dominate the search page. Capture every type of buyer.

Tracking both

The biggest mistake contractors make is treating LSAs and Google Ads as separate silos.

Use the same CRM for leads from both sources. Track cost per customer, not just cost per lead. Call tracking shows which calls came from which source.

When you can compare apples to apples—actual customers acquired per dollar spent—you can make real decisions about where to invest.

No matter which platform you choose, visitor identification helps capture leads that leave without converting. Retargeting keeps you visible until they’re ready. For related strategies, see how to capture lost leads.