When it comes to generating local leads, Google search engines can be a company’s best friend or worst enemy. At least once a week, 8 out of 10 consumers use search engines to find local information. That must mean if you invest in online advertisements, it can automatically convert more local users into customers, right? Wrong.
When it comes to getting your business in front of local customers, Google offers two powerful advertising platforms:
- Google Ads (PPC)
- Google Local Services Ads (LSAs)
These platforms might seem like two sides of the same coin at first glance, but their function and purposes are quite different.
Most users performing high-intent searches on Google have probably already made up their minds about two things
- They are interested in a product or service your business offers
- They are exclusively interested in finding it in your service area.
Still, there’s no guarantee they will choose your business in a sea of other competing advertisements that may be stealing the spotlight.
Understanding how each platform works, what kind of results they deliver, and which one best aligns with your business goals can significantly impact your advertising ROI.
What are Local Services Ads?
Google Local Services Ads are digital advertisements that appear in search results when a potential customer in your area conducts a keyword search for relevant products or services.
LSAs are built specifically for local, service-based businesses. These ads show up at the very top of the search results, even above PPC ads, and include useful business information such as:
- Star ratings and customer reviews
- Business hours
- A phone number or message button
- A trust badge like “Google Guaranteed” or “Google Screened”
Advertisements will appear for local services and are typically the first ads a user comes in contact with. They can be displayed in several places, such as at the top of search results, above organic results, and even above pay-per-click Google Ads.
Unlike PPC, you don’t bid on keywords. Instead, Google uses your business category, location, and the user’s intent to decide when to show your ad. You’re only charged when a potential customer contacts you, making LSAs a pay-per-lead system rather than a pay-per-click one.
Types of Local Services Ads
- Google Screened Ads: These are local pay-per-lead advertisements that come from a business that has successfully passed a Google screening.
- Google Guaranteed Ads: These are pay-per-lead advertisements that come from a business that has successfully passed a Google Guarantee screening from a Google background check partner. Google Guaranteed Ads are the only LSAs that are backed by Google.
What Are Google Ads (PPC)?
Google Ads, also called pay-per-click ads, are displayed when a user performs a keyword search that is relevant to your product or service. This is Google’s main advertising platform, and these are the text-based ads that appear at the top and bottom of search results.
Advertisers bid on specific keywords, and when someone searches using one of those keywords, Google may show your ad. You pay only when someone clicks on it, which is why it’s called “pay-per-click.” Unlike pay-per-lead ads that are powered by proximity, PPC ads leverage keywords to determine what type of ad will be served during a user’s search.
With PPC campaigns, you have full control over:
- The keywords you target
- Your ad copy
- Landing pages
- Budget and bidding strategy
- Audience targeting
This level of customization makes PPC ideal for businesses with multiple services, specific messaging needs, or more complex sales funnels.
Types of PPC Ads
Google Ads is one of the most popular types of pay-per-click advertisements used by marketers and advertisers today. Below are several types of PPC ad types available and how they work:
- Search Ads: This is the most common type of PPC ad. Social ads employ an auction system to determine where each ad will rank in the results section. They are located above and below the organic search results in Google.
- Display Ads: This form of pay-per-click advertisement is powered by user interest. Based on information generated from previous searches, advertisements are served to them as they browse the web. Google display ads typically have a lower click price than search ads.
- Shopping Ads: These ads appear in search engines and contain a title, description, price, and an image of the products offered by your business. Given that shopping ads are product-driven and not service-based, they are typically preferred by e-commerce businesses.
- In-stream Ads: These ads can appear before, during, and after a video that is being played. In-stream ads can be found in videos on platforms like YouTube.
- Gmail Sponsored Ads: These Gmail ads are displayed in your Gmail inbox and resemble regular emails. They can be created using Google Ads.
- Remarketing Ads: These ads use third-party cookies to serve ads to users who have visited a website previously. Given these are individuals who have already expressed interest in your products or services, remarketing ads help your business remain top-of-mind until these users are ready to convert.
Search Volume: Who Reaches More People?
One major difference between LSAs and PPC ads is reach.
Google Ads allow you to reach a much wider audience. Because you can bid on both broad and specific keywords, your ads can show when someone is researching, comparing options, or ready to make a purchase.
LSAs are more limited. They only appear for local, high-intent searches such as “plumber near me” or “divorce attorney in Seattle.” While the overall volume may be lower, the users are often more ready to act, which can lead to higher-quality leads.
Quality of Leads
Pay-per-click and pay-per-lead are similar in many ways. For starters, both generally have decent lead quality. However, only one of these methods has a system in place that ensures that leads received are relevant to your business, so it won’t impact your bottom line. In the case of LSAs, leads that are not in search of local services or that do not live locally will not be considered qualified leads.
Cost Structure: Clicks vs. Leads
The way you’re charged varies significantly between the two platforms:
- PPC: You pay every time someone clicks your ad, whether or not they convert into a lead or customer. Costs vary based on keyword competition and ad quality.
LSAs: You pay only when a potential customer contacts you directly through the ad. This could be through a phone call or a message. You’re paying for valid leads, not clicks.
For service-based businesses that depend on calls or appointment bookings, LSAs can provide a more consistent cost-per-lead.
You can also set a maximum cost per lead in your LSA account, giving you control over how much you’re willing to spend per inquiry. However, setting a low maximum can reduce your ad visibility and limit the number of leads you receive. Google prioritizes higher-paying leads in competitive markets, so your ad may show less often if your cap is significantly below the average lead price in your area or industry.
Control and Customization
If you’re looking for flexibility and control, PPC offers far more options. You can build different campaigns for each service, fine-tune your keyword targeting, test different ad versions, and track how users behave after clicking.
LSAs are simpler but more restricted. You don’t write your ad copy, choose keywords, or control when your ad appears. Instead, ad placement is influenced by:
- How close you are to the searcher
- Your business hours
- Your responsiveness to leads
- Your review rating and number of reviews
This hands-off approach makes LSAs easier to manage but limits your ability to customize.
Business Eligibility and Requirements
Google Ads PPC is accessible to nearly any business, including online stores, consultants, SaaS providers, restaurants, and local service businesses.
LSAs are available only to local, service-based businesses, and the setup process is more strict. You’ll need to complete a Google screening process, which can include:
- Background checks
- Verification of licenses and insurance
- Proof that your business is in good standing
Although this extra step takes time, it can boost trust with potential customers.
Reviews, Trust Signals, and Conversion
LSAs highlight trust elements more prominently than PPC. Your Google reviews, star ratings, and the trust badge appear right in the ad, making it easier to build credibility quickly.
PPC ads can also feature star ratings using Seller Ratings extensions, but they are less prominent. Conversion performance for PPC often depends on how well your landing page meets the needs of the person who clicked.
Tracking and Reporting
Both models have their own unique analytics that a user can review to determine the success of their advertisements. However, when it comes to analytics, PPC offers a wide range of metrics that LSAs do not.
- PPC offers advanced tracking tools. With Google Analytics, conversion tracking, and detailed performance reports, you can fine-tune your campaigns and make data-driven decisions.
- LSAs provide basic reporting. You’ll be able to see how many leads your ads generated (calls and messages), but deeper analytics, such as conversion paths or user behavior, are not available. If advanced performance tracking matters to you, PPC is the stronger choice.
So, Which Should You Choose?
Which would you say is the most important to your business: a click or a lead? It sounds like an easy answer, but the decision isn’t as simple as it seems.
Here’s a quick way to help you decide:
- Choose LSAs if you’re a local service provider (like a plumber, HVAC technician, or attorney) who wants to generate qualified leads with minimal setup.
- Choose PPC if you need greater control, want to target a wider range of keywords, or provide products or services beyond local home services.
The beauty of running PPC ads is that they can drive users to a destination to measure their interest and gain valuable information from this interaction that can be used to improve conversions.
On the other hand, Local Services Ads can increase exposure by targeting local users and following them throughout their journey to becoming leads.
These two models can have immense benefits when used together and should not be seen as interchangeable, but instead, perceived as two powerful tools that should be included in your marketing arsenal.
Why You Should Consider Running Both
In many cases, the most effective strategy is to use LSAs and PPC together. While each platform has its strengths, they can work in tandem to maximize your visibility, lead quality, and marketing ROI.
Here’s how these platforms can complement each other:
1. Maximize Search Visibility
Using both platforms allows your business to appear multiple times on the same search results page. For example, your LSA might show at the very top of the page, while your PPC ad appears just below. This increases brand presence and trust, and improves the likelihood that a potential customer will engage with your business.
2. Capture Different Stages of the Funnel
LSAs focus on bottom-of-the-funnel leads, a.k.a. people who are ready to call or book immediately. In contrast, expert Google Ads management can target top and middle-of-the-funnel users, such as those researching services, comparing providers, or reading reviews. By running both, you can build a full-funnel strategy that nurtures leads from discovery to decision.
3. Balance Lead Volume and Quality
LSAs typically generate fewer but higher-intent leads, while PPC can bring in larger volumes of traffic. Note that a lot of that PPC traffic may be consumers who are early in the buying process. Running both helps you strike a balance between lead quality and lead quantity.
4. Test and Optimize Across Platforms
With PPC, you can test different messages, landing pages, and targeting strategies to find what works best. These insights can inform how you position your business in your LSA profile and improve your response strategy. In the other direction, if certain services perform well through LSAs, you can amplify them with targeted PPC campaign management.
5. Safeguard Against Market Fluctuations
Performance can vary by season, service demand, or competition. Relying on just one platform may leave you vulnerable during slow periods. Running both gives you flexibility and stability by diversifying your lead sources.
Whether you’re trying to dominate the local map pack, boost inbound calls, or capture early-stage researchers, combining LSAs and PPC provides a well-rounded, resilient advertising strategy that helps you reach more potential customers with less risk.
Final Thoughts
Both Google Ads PPC and Local Services Ads can drive real business results, but they cater to different needs and business models. Whether your goal is higher visibility, more phone calls, or measurable ROI, choosing the right platform (or a mix of both) can help you grow more efficiently.
Need help? Our team specializes in both PPC and LSAs, and we can craft a strategy that fits your goals.
Want a free campaign audit or ready to get started? Contact us today.
Kelsey Davis
Leave a Reply