Google Local Service Ads (LSAs) Explained: Are They Worth It?

If you've searched for a plumber, electrician, or HVAC company on Google lately, you've probably noticed the ads at the very top of the page — the ones with the green "Google Guaranteed" checkmark.

Those are Local Service Ads (LSAs), and they've become one of the most effective advertising channels for home service businesses. But they're also misunderstood, and many businesses aren't sure whether they're worth the investment.

This guide breaks down everything you need to know about LSAs: how they work, what they cost, and whether they make sense for your business.

What Are Local Service Ads?

Local Service Ads are a pay-per-lead advertising format from Google specifically designed for local service businesses. They appear at the very top of search results — above regular Google Ads and organic results.

Unlike traditional pay-per-click ads where you pay when someone clicks, LSAs charge you only when a potential customer contacts you through the ad. That contact could be a phone call or a message.

Each LSA shows:

• Your business name
• Star rating and review count
• Years in business
• Hours of operation
• The "Google Guaranteed" or "Google Screened" badge

The badge is the key differentiator. It tells customers that Google has verified your business through background checks, license verification, and insurance confirmation.

How LSAs Work

The Verification Process

Before you can run LSAs, Google verifies your business:

Background checks: You, your owner(s), and any field workers must pass background checks. This includes criminal history checks and, for some industries, civil litigation checks.

License verification: Google confirms you hold valid licenses required for your trade in your service area.

Insurance verification: You must have adequate general liability insurance (minimums vary by industry).

This process takes 2-6 weeks depending on your industry and how quickly you submit documentation.

Bidding and Ranking

Unlike regular Google Ads, you don't bid on specific keywords. Instead, you set a weekly budget and Google shows your ad for relevant searches in your service area.

Your ranking depends on:

• Proximity: How close you are to the searcher
• Reviews: Your rating and number of reviews
• Responsiveness: How quickly you respond to leads
• Business hours: Whether you're currently open
• Budget: Higher budgets can get more visibility

Notice that you can't just buy your way to the top. Reviews, responsiveness, and proximity matter significantly.

The Pay-Per-Lead Model

You only pay when a potential customer contacts you. Lead costs vary by industry and market:

• HVAC: $20-50 per lead
• Plumbing: $20-45 per lead
• Electrician: $20-40 per lead
• Roofing: $30-60 per lead
• Locksmith: $15-35 per lead

These are general ranges — your actual costs depend on competition in your area.

Importantly, you can dispute invalid leads. If someone calls about a service you don't offer, or the call is clearly spam, Google will often credit you back.

LSAs vs. Google Ads: Key Differences

They're not mutually exclusive. Many home service businesses run both LSAs and traditional Google Ads, capturing leads at different points in the search results.

Pros of Local Service Ads

Pay Only for Leads

This is the biggest advantage. With regular Google Ads, you pay for every click — even if that person never calls. With LSAs, you only pay when someone actually contacts you.

For businesses with limited budgets, this reduces risk significantly.

Top-of-Page Placement

Nothing appears above LSAs. Not organic results, not regular ads. This prime real estate gets significant visibility.

Trust Signal

The Google Guaranteed badge matters. Customers see it as a safety net — if something goes wrong, Google may reimburse them up to $2,000. This builds trust, especially for services that involve entering someone's home.

Simple Management

LSAs are much simpler to manage than traditional Google Ads. No keywords to research, no ad copy to write, no quality scores to optimize. Set your budget and services, respond to leads, and collect reviews.

Built-In Lead Quality Filter

The verification process and pay-per-lead model naturally filter out some low-quality traffic. People clicking LSAs are generally serious about hiring — they wouldn't contact you otherwise.

Cons of Local Service Ads

Limited Control

You can't choose exactly which keywords trigger your ad. You can't write custom ad copy. You can't bid on specific search terms. Google decides when and where to show you.

For businesses that want granular control over their advertising, this is frustrating.

Verification Barriers

The background check and verification process can be a hurdle. If you have employees with issues in their background, you may not qualify. The process also takes time — you can't launch LSAs instantly.

Review Dependency

Your ranking depends heavily on reviews. New businesses without many reviews struggle to compete against established competitors with hundreds of reviews.

Variable Lead Quality

While lead quality is generally decent, it's not perfect. You'll still get some tire-kickers, price shoppers, and people looking for services you don't offer. The dispute process helps, but it's not instant.

Category Limitations

LSAs aren't available for every industry. Google continues to expand, but some service categories can't use LSAs yet.

Setting Up and Optimizing Your LSA Profile

Getting Started

1. Go to ads.google.com/localservices
2. Create your profile with business information
3. Submit documentation for verification
4. Set your service areas and services
5. Set your weekly budget
6. Wait for approval (2-6 weeks)

Profile Optimization

Once approved, optimize your profile:

Add all services: The more services you list, the more searches you're eligible for.

Set accurate service areas: Be specific. If you don't serve certain zip codes, don't include them — you'll pay for leads you can't service.

Upload photos: Add professional photos of your team, vehicles, and work. Profiles with photos get more engagement.

Highlight specialties: If you offer emergency service, eco-friendly options, or specific certifications, make sure these are reflected in your profile.

Responding to Leads

Response time matters — a lot. Businesses that respond within 5 minutes convert leads at significantly higher rates than those that wait hours.

Set up notifications so you know immediately when a lead comes in. Have a system for responding quickly, even during busy times.

Managing Reviews

Your star rating and review count directly impact your ranking. Actively generate reviews from LSA customers:

• Ask after every successful job
• Make it easy with direct links
• Respond to all reviews professionally

Google reviews on your Business Profile sync with your LSA profile. They're the same reviews.

Is It Worth It? A Real Cost Analysis

Let's run the numbers for a hypothetical HVAC company:

LSA Performance:

• Monthly budget: $2,000
• Average cost per lead: $35
• Leads generated: 57
• Lead-to-appointment rate: 50%
• Appointments: 28
• Appointment-to-sale rate: 40%
• Jobs closed: 11

Revenue:

• Average job value: $800
• Total revenue: $8,800
• Ad spend: $2,000
• ROI: 4.4x

For every $1 spent, this company generates $4.40 in revenue. That's strong performance.

Compare this to traditional Google Ads for the same company:

• Monthly budget: $2,000
• Average cost per click: $15
• Clicks: 133
• Click-to-lead rate: 5%
• Leads: 7
• Cost per lead: $286

Same budget, dramatically different cost per lead. The pay-per-lead model often outperforms pay-per-click for local services.

Of course, your results will vary based on your market, competition, and how well you convert leads.

When LSAs Make Sense (And When They Don't)

LSAs make sense when:

• You're in an eligible service category
• You can pass background and license checks
• You have (or can generate) reviews
• You can respond to leads quickly
• You want simpler ad management
• You're in a competitive market where trust signals matter

LSAs might not be right when:

• You're brand new with zero reviews
• You need precise keyword targeting
• You can't commit to fast response times
• Your industry isn't yet supported
• You have complex service offerings that don't fit standard categories

The Bottom Line

Local Service Ads are one of the most effective advertising channels for home service businesses. The pay-per-lead model reduces waste, the Google Guaranteed badge builds trust, and the top-of-page placement drives visibility.

They're not perfect — limited control and review dependency are real drawbacks. But for most home service businesses, LSAs should be part of your marketing mix.

If you're already running Google Ads, add LSAs as a complement. If you're new to digital advertising, LSAs are a relatively low-risk place to start.