Search for a local service and you’ll often see two kinds of ads: a box of businesses with star ratings and a “Google Verified” badge, and regular text ads with a headline and a link. The first is Local Services Ads (LSA). The second is a Google Ads Search campaign.
Clients often ask me which one to pay for. It depends on your category, your city, how you handle phone calls, and how much control you need.
LSA changes often, and it’s in the middle of a big change right now. Everything below about Google’s products links to Google’s own help pages; where something is my opinion, I say so. Before you decide anything, check eligibility for your category and city on Google’s Local Services Ads page.
The short answer
- Local Services Ads charge you per lead (a call, message or booking), not per click. They’re limited to certain service categories and locations, and you have very little control over which searches trigger them.
- Google Search ads (classic PPC) charge you per click. Any business can run them, and you control the keywords, the ad text, the landing page and the budget in detail.
- Running both often makes sense for an eligible local business, because they show in different places on the same results page.
How Local Services Ads work
You pay per lead, not per click
With LSA, Google says you “only pay when potential customers get in touch through your ads.” A lead can be a phone call you answer, a text or email from the customer, a voicemail, or a booking request where that feature is available (How leads work).
Google says lead prices “may vary depending on your location, the job type, the type of lead, or your bidding mode,” and that message leads “are typically priced lower than the corresponding phone lead price” (How leads work).
Bidding and ranking
Your bid is “the most you’d pay for a lead.” Google has offered three bidding modes in the LSA dashboard: Maximize leads (Google sets the bid), Target cost per lead, and a manual Max per lead (How bidding works).
Bid isn’t the only thing that decides who shows first. Google’s ad ranking page lists your responsiveness (“Missed calls may negatively affect your responsiveness”), the context of the search, and profile quality, which includes “your rating, number of reviews, average response time, use of high-quality images, the verification checks you have completed.”
Budget settings
In the LSA dashboard you set an average weekly budget. Google uses it as a target, and calculates a monthly maximum from it. Some weeks you’ll spend less, some more, but “You will never exceed your monthly max,” and once you hit it your ad stops for the rest of the month unless you raise the budget (How to edit your budget).
Google Guaranteed, Google Screened and the new Google Verified badge
You’ll still find plenty of articles about the “Google Guaranteed” and “Google Screened” badges. That’s out of date. Google says it is “simplifying our advertiser badging by launching a single badge for all advertisers”: the Google Verified badge. As part of that change, Google is “discontinuing the Money Back Guarantee associated with the Google Guarantee badge” (About Google Verified badge).
To get it, you go through Google’s screening and verification. Depending on your category and location, that can include background checks (for select US and Canada businesses), business registration, Google Business Profile verification, insurance and license checks, and for some categories an advanced verification with account review and video interviews. Google says “Businesses aren’t charged for the background check” (Screening and verification process).
Which categories and countries are eligible?
Google groups LSA categories into Home (plumbing, contracting, moving), Business (lawyers, accounting, real estate), Health (dentist, optometrist, primary care), Learning, Care, Wellness, Beauty and Automotive (Google Local Services Ads). In the US, Google marks some, such as architect and interior designer, as “California and Florida only” (Getting started).
Local Services is available in the United States and Canada, plus the UK and several European countries (About Local Services). The category lists differ, though: the Canadian version of Google’s getting-started page lists mostly home services, such as plumbers, electricians, HVAC, movers and roofers. Features differ too:
- Call recordings in the lead inbox are US only, and not available for health care or tax specialists (Manage leads).
- Booking leads aren’t available for health care verticals (Getting started). Google’s pages don’t agree on where bookings are offered: one says US and Canada, the booking leads page says US only.
- Automated lead credits apply in the US and Canada, but not to health care verticals or tax specialists (Automated lead credits).
So a US dental practice or law firm may be eligible but won’t get every feature a plumber does, and in Canada it may not be eligible at all. Check your exact category and city.
Disputing bad leads
Older guides describe disputing leads one by one. Google’s current page describes an automated system instead: leads “determined to be invalid or low quality are not charged,” and charged leads “get reassessed by our models over time, and may be issued credits automatically.” Credits usually land “within 30 days,” and the original charge still shows on your invoice (Automated lead credits).
Know what Google does not credit. Its leads page lists valid leads that won’t be credited, including a lead “received outside of your business hours,” a customer “researching potential projects or prices,” and a customer who “didn’t respond to your return call or message.” And Google “no longer supports credits for ‘job type not serviced’ and ‘geo not serviced’ leads” (Automated lead credits). So keep your hours, services and service areas accurate from day one.
The big 2026 change: LSA is moving into Google Ads
Google is migrating Local Services Ads into Google Ads as Performance Max campaigns with pay-per-lead goals (LSA transition). According to that page:
- “August 2026: The first phase of the migration begins for select home and storefront service advertisers in the United States.”
- “Late 2026: The migration expands to broader advertiser groups,” and in 2027 “Non-U.S. accounts, and all remaining business categories” follow. That includes Canada.
- “You still only pay for valid leads (such as phone calls and messages) rather than ad clicks.”
- Ads “will continue to show exclusively on Google Search and Google Maps in the same ad positions as before.”
- “Manual bidding (such as setting a maximum cost-per-lead) is no longer supported in Google Ads,” and your weekly budget “is automatically divided by 7” to set a daily average.
- “After your account is migrated, you will no longer be able to access your original Local Services Ads dashboard,” and Google advises downloading your historical reports first.
So soon, “Google Ads vs Local Services Ads” will partly be a choice between campaign types inside one Google Ads account. The core trade-off stays: pay per lead with little control, or pay per click with a lot of it.
How Google Search ads work
A Search campaign shows text ads when “someone searches with terms related to one of your keywords.” Ads “can appear above or below search results on Google Search,” and also on Google Maps and other surfaces (About the Search Network). With cost-per-click bidding, “you pay for each click on your ads” (Cost-per-click), whether or not that click turns into a call or form.
Where your ad shows depends on Ad Rank, which considers “your bid amount, the quality of your ads and landing page,” auction competitiveness and “the context of the person’s search” (Ad Rank).
What you get for paying per click is control:
- You choose the keywords and match types, so you can target “emergency water heater repair” and skip “water heater repair jobs.”
- You see the searches that triggered your ads in the search terms report, and add irrelevant ones as negative keywords.
- You write the ads and pick the landing page.
- You decide what counts as a conversion. Conversion tracking can measure form submissions, calls from your ads, calls to the number on your website, and offline sales you import.
The catch: you pay for clicks that don’t convert, so the landing page and conversion tracking have to be right. If your tracking isn’t solid, my analytics and tracking setup service is where I’d start.
How they appear on the results page
Google’s pages describe LSA as a unit “shown prominently in Google Search results” (Getting started), and Search ads as appearing “above or below search results” (About the Search Network).
In the searches I’ve looked at, the LSA box usually sits at the very top when it shows, above the text ads, with the business name, rating, reviews, badge and a call or message button. Text ads follow with your headline, description and assets. Layouts vary by search, device and city, so treat that as a common pattern, not a rule.
Google Ads vs Local Services Ads: side by side
| Local Services Ads | Google Search ads | |
|---|---|---|
| You pay for | Valid leads (calls, messages, bookings where offered) | Clicks |
| Who can run them | Eligible categories and locations only, after screening | Almost any business |
| What triggers the ad | Google matches searches to your category, job types and service area | Your keywords and match types |
| Ad content | Your profile: name, rating, reviews, badge, hours | Headlines, descriptions and assets you write |
| Landing page | None; people contact you from the ad | Your website or landing page |
| Ranking factors | Bid, responsiveness, reviews, profile quality, verification | Bid, ad and landing page quality, search context |
| Budget | Weekly average with monthly max (daily average after migration) | Average daily budget |
| Bad traffic | Automated credits for invalid or low-quality leads | Negative keywords and search terms review |
| Badge | Google Verified | None |
| Where managed | LSA dashboard, moving to Google Ads in 2026–2027 | Google Ads |
Sources: the Google help pages linked above. The table is my summary.
When to run LSA, Search, or both
LSA first (or alongside) if
- Your category and city are eligible, and you can pass verification.
- You have good reviews, or you’re collecting them. They feed into LSA ranking.
- Someone reliably answers the phone and replies to messages fast. Missed calls hurt your ranking, and leads you don’t follow up on still cost money.
- Your services are simple and match LSA’s job types well, like a plumber, electrician or landscaping company.
Search ads first if
- Your category isn’t eligible for LSA where you operate.
- You need to target specific, high-value services, and filter out jobs you don’t want.
- You need a landing page to sell the service, which is common for med spas and clinics.
Both if
- You’re eligible for LSA and have the budget to test both. They show in different places, so you can take more of the page for the same search.
- You want LSA for simple “near me” leads and Search to push specific services through pages you control.
If you run both, track them separately and compare cost per booked job, not just cost per lead. That’s the only way to know which one is pulling its weight.
FAQ
Is LSA cheaper than Google Ads?
It depends on your category, market and how many leads turn into jobs. LSA charges per lead and Search charges per click, so compare them on cost per booked job, not cost per lead or per click.
Are Local Services Ads available in Canada?
Yes, Canada is one of the supported countries, but features differ. For example, call recordings are US only. Under Google’s current timeline, non-US accounts move into Google Ads in 2027. Check eligibility for your category and city.
Not sure which one fits your business?
I’ve managed Google Ads for 7+ years across 50+ industries, and I’m a Google Premier Partner. If you’re already running LSA, Search ads or both and want an outside view, my Google Ads audit costs $120: a recorded video walkthrough and a PDF, delivered in 3 business days. If you’d rather hand the account over, see my Google Ads management and pricing.