Think about the last time you tried to find a plumber. Did you use Google to find a national provider and then use their website to look up a plumber near you? Probably not. Did you search for “best plumber in (my town)?” Possibly. More likely, though, you simply typed in “plumber” and Google Search did the rest. It does this by automatically reading your location and presenting you with a list of ads and organic results of plumbers in your area. Google Local Service Ads (LSAs) are a key part of this system, and using them can give your business a major boost in visibility.

Local advertising, including LSAs, is now so familiar that marketers overlook its potential. It's easy to get distracted by machine learning, contextual personalization and other exciting new developments in the advertising industry. Sometimes, though, the simplest methods remain the most effective.

That means that if you provide a local service, you should advertise locally. In this article, we’ll explain both why and how.

The Problem With Ads

There are many problems with the way that advertising works at the moment. The biggest problem is simply that customers don’t trust advertising.

That simple phrase hides a lot of complexity, however. One reason for customer distrust is the huge advertising budgets many national companies have. These companies can afford to spend (or waste) money plastering the web with ads. It's similar to a fisherman casting a wide net to snare the biggest catch possible.

Unfortunately, such ads can make searching for local services difficult. Users may see results sponsored by national companies that don’t actually provide services in their area, for example. Not only is this a poor use of advertising dollars, it's also a waste of people's time. Irrelevant ads result in frustrated users who are reluctant to trust other ads, even when they might actually be helpful.

Another reason why the average user is skeptical of ads is more technical: the rise of malvertising. Local companies often don’t have the budget to employ expensive and experienced graphic designers. This can lead to their ads looking a little … dated, let’s say. These ads can seem suspicious, because users (rightly) associate poorly written copy and poorly formatted images with malware.

A third reason has more to do with human nature. Up until a few years ago, most skilled professionals relied on word-of-mouth recommendations to generate local business. Google hasn’t changed that. People like to employ local workers who understand their community and needs and prefer this to having to deal with a faceless national conglomerate.

Google’s Local Services Ads (LSAs) avoid these problems by providing local businesses with a direct, geolocalized connection with users in their area. But that’s not the only advantage of LSAs.

Advantages of Google Local Services Ads

Local Service Ads offer a number of clear advantages. One is they are simply a cost-effective method for local businesses to reach customers. Running an ad in your local area is much cheaper than paying for ads outside of your service area, too. As such, LSAs are a great way to maximize the impact of your advertising spend.

A second reason is that LSAs are effective at driving clicks and traffic to your website. Take a look at the data and this becomes clear. Blue Corona found that when LSAs were available on SERPs, they received 13.8% of local SERP clicks. The presence of an LSA at the top of SERPs also affects the total number of clicks for all other SERP types. When LSAs are present in search results, paid ad clicks account for a total of 25.3% of all user clicks.

There are also indications that LSAs will become even more important in the years to come. Despite concerns about privacy, smart speakers such as Google Assistant are becoming more popular. LSAs are one of the few ways businesses can appear in the nearly 20% of searches made in this way, according to Google.

The Difference Between LSAs and Pay-Per-Click (PPC) Ads

If your business has ever advertised on a major search engine like Google, you're likely familiar with PPC ads. With this advertising model, you pay a fee every time a user clicks on your ad.

Paid search is the most common PPC advertising method. When a user searches for a product or service, Google uses a complex algorithm to determine which ads are most relevant to display. This automated process is a bidding-based system called the Ad Auction.

To use Ad Auction, advertisers bid on keywords that Google will use to display their ads. Some business owners feel that using PPC ads is a bit overwhelming because choosing the right keywords can be a challenge.

In comparison, Google's Local Service Ads don't require heavy keyword research to get started, which can make this an ideal advertising method for beginners. Google will generate LSAs based on your business's services, location, phone number, hours and other relevant information. You only pay when a user clicks through the listing to contact your business.

When a user searches for a business, Google shows the LSAs of nearby providers at the top of the page. Google also displays your business's reviews alongside its LSA.If you have great reviews, this can give users a compelling reason to choose your business over your competitors.

Getting Started With Google Local Service Ads

Setting up your first Google LSA is a fairly straightforward process. There are three main steps:

  1. Determine eligibility and sign up as a service provider
  2. Verify your business
  3. Set your advertising budget

If you're ready to give LSAs a try, let's take a look at each of these steps in a bit more detail.

Determine if Your Business is Eligible for Local Service Ads

Not every type of business is eligible to use LSAs. At this time, the business categories that are eligible include:

  • Repair services
  • Lawyers and most legal services
  • Cleaning services, including junk removal
  • Landscaping, lawn care and tree services
  • HVAC
  • Carpentry, plumbing and electrician services
  • Roofing, siding and garage services
  • Foundation and flooring services
  • Locksmiths
  • Real estate
  • Tax and financial services
  • Pest control
  • Moving services

To find out if your business can use LSAs, use Google's Eligibility Checker tool.

Creating Your Profile

If you're eligible, you'll go to a page where you can enter your business's details. Google uses this information to create your LSA, so make sure it's accurate before moving on.

If your business has an address that people can visit, you can choose to display it with your ad. This allows users to see your location on Google Maps and get directions to your business's address.

Next, you'll set up your service area. Google automatically selects a suggested service area for you based on your business address. You can also add neighborhoods, cities and ZIP codes you'd like to serve, or remove certain ZIP codes from your service area. Google will only show your ad to people in the service area you choose.

Once you're done setting up the service area, choose the types of services your business offers and enter your business's hours of operation. You'll also need to agree to undergo a free background check and professional license verification. Depending on your business type, you might also be eligible to get one of two badges for your ad: Google Screened or Google Guaranteed.

Background Checks and Google Badges

Google's background check is required to participate in the Local Service Ads program. The process can vary by your business's location and category. It may include checks for criminal history, civil litigation history, insurance, licensure and business regulations.

If your business requires general liability insurance, you'll also need to submit a valid certificate of insurance before you can use LSAs. Certain types of businesses are also required to undergo an Advanced Verification process. Google does this to stop fraudulent businesses from advertising using false identities.

Businesses that successfully complete the screening process may receive the Google Screened or Google Guaranteed badge for their ad. These badges assure customers that your business has been thoroughly vetted and can help you build a trusted reputation online.

Learning Opportunities

Only businesses that provide professional services can receive the Google Screened Badge. Eligible services include real estate, law and financial planning.

The Google Guaranteed badge is only given to businesses that provide services at customer's homes. These can include repair services, tree removal and pest control. If you have this badge, Google may provide reimbursement in the event a client isn't satisfied with your quality of work. The upper limit for reimbursement is $2,000. Customers can't get reimbursement for cancellations, property damage, provide responsiveness or dissatisfaction with price.

Editing Your Budget

Setting up your advertising budget is one of the most important parts of the Google Ad process. That's because Google uses your budget to determine how many leads you'll get in a given week.

You're not necessarily guaranteed to get a certain number of leads, though. For some weeks, you might pay below your budget or exceed it depending on demand for your business.

Google also sets a monthly spending maximum depending on your weekly budget. Once you've reached the maximum spend for the month, customers will no longer see your ad on Google until the next month begins.

To save money on advertising, you can schedule your ad to run only during certain times. The default setting is "Always on," which allows your ad to run 24 hours a day, seven days a week. Choose "Only during my business hours" to run the ad when your business is open. Select "Custom hours" to run your ad during other specific times.

All About Leads

Google charges you for every lead that contacts your business directly through your LSA. Prices can vary depending on the type of lead, your bidding mode, your location or the type of job requested. Google considers a lead valid in the following situations:

  • You get a booking request from a customer.
  • You receive a text message, voice mail or email from a customer.
  • A customer calls you, and you speak with them over the phone.
  • You miss a phone call (without voice mail) and return a customer's message with a call, email or text message.

Bidding On Leads

A bid is the most you're willing to pay Google for a lead. When you place a bid, you're competing with other businesses that are bidding in your service area. Together, these bids determine how much a lead is worth.

Bidding higher than your competitors can increase your ad's rank in search results. Other factors, like customer reviews, can affect ad placement too. Google offers two bidding modes:

Set max per lead: This option allows you to manually enter the maximum you'll pay per bid. Your weekly target is affected by your bid per lead.

Maximize leads: Google recommends this option, particularly for people new to Local Service Ads. Google automatically chooses a bid for you based on your weekly budget. It's suggested to set a minimum of 10 leads per week for best results.

Managing Leads

Google provides a Local Service Ads app that enables you to receive new lead notifications, manage leads and see information about booked jobs. Depending on your location, you'll receive leads in one of three ways.

Phone call leads: When a customer calls the Google forwarding number on your LSA, their call is directed to your actual business number. You'll hear a message that says "Call from Google," so you know the lead is calling because of your ad campaign.

Message leads: When a customer sends you a message, you can view it in the conversation box, respond or decline the request in the app. Message leads cost half the price of phone call leads. If you don't want to receive message leads, Google allows you to opt out.

Booking leads: Businesses backed by the Google Guarantee can choose to receive leads through one of the company's booking partners. Booking systems let customers see your pricing for services and availability before contacting you.

Ad Rankings and the Performance of Your LSA

As mentioned earlier, how much you're willing to bid isn't the only factor that determines your ad's placement. Google uses many other factors to decide which ad to show users. These include:

  • Your business's proximity to the customer's location
  • Whether your business is currently open or closed
  • Google badge of trust status
  • Your business's number of reviews and overall review score
  • Responsiveness to customer queries.
  • Complaints Google may have received about your business

The Bottom Line

Local Service Ads are an excellent way to find new customers, but you shouldn't rely on them alone. While they are great for driving traffic, they have a more limited utility when it comes to general SEO. That’s why, for instance, 53.6% of real estate agents think adding more locally-focused content to their real estate website will make it more appealing. But the most successful agents also target the national market. That's because people like to search for properties where they would like to live, and not just where they do live.

When planning your advertising strategy, consider an integrated, mixed approach — one that makes the most of both LSA and national-level advertising.

That might sound complicated, but using LSAs is relatively simple and gives you experience in building more complex advertising strategies. Paying attention to your local customers is a great test run for ensuring cultural sensitivity in your marketing. And, if you plan on expanding your operations to new areas, LSAs can be an invaluable part of your advertising toolkit.