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Google Local Services Ads: What to Know About Home Service Ads & How they Work

Hansel Merchor master of PPC and GDN strategy
Hansel Merchor

By now, everyone in the home services industry has heard of Google’s latest offering: Local Services Ads (LSA), which until recently were called Home Service Ads or HSA for short. As an agency that is deeply involved with the home services world, Mediagistic has seen this coming for the better part of two years.

Initially beta-tested in West Coast markets, these ad units are being rolled out to more than 30 cities across the nation by the end of 2017. Based on how we’ve seen the search results landscape change over time, we can say with certainty that most major metros in the country will be prominently displaying local services ads on top of search results ads by the beginning of 2018.

What are Local Services Ads and How Do they Affect Advertisers?

Google’s local services ads are a new type of ad unit designed to provide an easy connection between consumers and trusted home service professionals like locksmiths, plumbers, HVAC, electricians, garage door installers, roadside assistance, auto glass installers, house painters, handymen and house cleaning services.

The model is based on your cost per lead (connected calls, voicemails and missed calls that are returned), and prices vary depending on the market and vertical. However, tests have shown that they usually are between $15 and $26, with a few outliers. Costs, as with most things in life, should be expected to change over time.

Home Service Ads display on top of Pay Per Click Ads. On desktop, you can see three results featuring the dealer name, the Google Guaranteed distinction, and location, phone number and available hours. Mobile results display two LSA ads on top of Pay Per Click ads.

In both desktop and mobile, there is an option to view additional information about the contractor selected. The info included is an overview of the company history, qualifications (such as licensing and insurance), services (maintenance, repair, etc) and service areas, as well as Google reviews and the star system. The phone number displayed is not a contractor’s phone number but a Google forwarding number. The click to call option is of course, there on the listing.

What is Required from Dealers to Participate?

At this point, acceptance into the LSA program is by invitation only. Google sales teams are currently working aggressively signing up clients and submitting business entities, owners and fieldworkers (every single person that will come in contact with a client must be submitted) through background checks; this is where the Google Guaranteed distinction comes from.

According to Small Business Trends, Google treats these background checks very seriously:

“All Google Guaranteed providers undergo background checks by Pinkerton Consulting and Investigations, Inc. This includes checks of identity and criminal history, applicable trade licenses, insurance, civil litigation history and more.”

Unlike Pay Per Click, where strategy plays a major role in the success of every lead gen effort, LSA bases its results on location, reviews and responsiveness. This means that, in order to stay in the program and occupy top position, contractors must deliver services (or respond to the leads) in a timely manner and must cultivate the kind of customer relationships that motivate their clients to leave ‘positive’ reviews.

How Will these Ads Affect Paid Search Campaigns for Home Services Dealers?

Since the LSA beta started, the Mediagistic performance marketing team has been working closely with Google team and the LSA team. Even though some things are unclear in terms of rollout, the effect that this program could have on other paid online marketing efforts is perhaps the most unclear.

Google, however, has been very clear in stating that LSA is not a replacement to Pay Per Click advertising; in fact, Google insists that LSA is actually “a compliment” to PPC campaigns. One of our sources even phrased LSA ads as a new advantage to those that qualify, because it “enables us to double serve” on the first page by potentially displaying both an LSA and a PPC ad at the same time. What that extra visibility really means remains to be seen; doubtlessly, it will become clear in the coming weeks and months.

The one thing that is clear, though, is that LSA will have some kind of effect on Pay Per Click. The question is how much of an impact will LSA ads have in a PPC campaign?

As an agency, we have yet to experience any negative impact on campaigns that are running in markets where LSA ads have been live for months. From impressions to clicks and leads, all PPC performance metrics are trending upward from 2016.

Currently, a search for home services in Sacramento, where LSA ads were first beta tested and have been live for over two years, will yield a combination of LSA and PPC ads. Significantly, marketers have not stopped running AdWords PPC campaigns in these markets; if anything, they’ve only become more competitive.

This could potentially indicate that both ad units could co-exist, that one does not replace the other and that a combination of both is perhaps the best balance to remain thriving in the marketplace.

Here at Mediagistic, we are currently opting our LeadBuilder clients into the LSA program. If you’re already a client, then all you have to do is reach out to your Mediagistic contact and let them answer all your questions; we’re here to assist you in a smooth onboarding process. And if you aren’t a client, then what are you waiting for? Our team has been working with these ads since day one, and we have the experience and the resources to ensure you can start taking full advantage of LSA and AdWords campaigns. Your paid search presence is in good hands with Mediagistic.

Hansel Merchor is Mediagistic’s Performance Marketing Manager. He’s widely experienced with overall performance marketing; regional, local and international lead generation; branding; media planning and media buying; retargeting, attribution modeling; social media, as well as e-commerce on nationwide and international SEM campaigns.

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