Short answer: Local Services Ads are Google's pay-per-lead ads for service businesses. They sit above the normal search ads, you pay when a customer calls, messages or books you rather than when they click, and you only get in after Google verifies your business. In 2026 two things changed for every contractor running them: the Google Guaranteed badge was replaced by a single Google Verified badge, and Local Services Ads are moving inside Google Ads.
This guide covers how LSA works now, what it takes to get approved, what decides where you show up, and how to tell whether it is actually producing work.
What Local Services Ads are
Local Services Ads (LSA) show at the very top of Google for searches like "roofer near me" or "emergency plumber", above the regular search ads and the map. Each listing shows your business name, rating, review count, hours and a verification badge, and the customer can call or message you straight from the ad.
Three things make LSA different from ordinary Google Ads:
- You pay per lead, not per click. A lead is a call, message or booking request that Google decides is valid. Someone looking at your listing and leaving costs nothing.
- There are no keywords. You choose your job types and service area, and Google decides which searches you appear for.
- You have to be verified first. License, insurance and background checks come before a single ad runs.
LSA runs inside the same Google Ads account as your search campaigns and draws from the same budget, which is why it helps to understand how LSA and search differ before judging either one.
Who can run Local Services Ads
LSA is open to service categories Google supports in your area, including most home services: plumbing, HVAC, electrical, roofing, pest control, cleaning, landscaping, general contracting and more. The list of categories and locations changes over time, so check eligibility for your trade and city before planning around it.
You also need a public, verified Google Business Profile. Google requires one for every Local Services advertiser.
Verification: what Google checks
Before your ads can run, Google screens the business. What it checks depends on your category and location, but for US home services it can include:
- Business registration for your company.
- Licenses at the state level, where your trade requires one by law.
- Insurance. Usually general liability. The minimum amount depends on your category and location, and Google shows the required figure on your verification dashboard. Your policy has to meet or exceed it.
- Background checks on the owner, and in some categories on field workers. Google calls out trades like electricians, HVAC, locksmiths and plumbers as categories that need service professional checks.
Google says the process takes three to four weeks on average after you submit your documents.
Most delays are paperwork mismatches rather than failed checks: a license issued under a different business name than the one on your Business Profile, an insurance certificate naming the wrong entity, or a category chosen that does not match the license you hold. Make the names match before you submit.
The badge: Google Guaranteed is now Google Verified
If you have read older guides, they will tell you LSA gives you a "Google Guaranteed" badge backed by a money-back guarantee for customers. That is no longer true.
Google discontinued the Google Guarantee and its Money Back Guarantee and replaced the old badges with a single Google Verified badge for all advertisers. Advertisers who had already completed verification were moved to the new badge automatically. New advertisers get it by passing the same screening and verification process. Customers could only request reimbursement under the old guarantee for jobs booked before December 7, 2025.
Google also says the change does not affect how your ads rank. We cover the details in what happened to the Google Guaranteed badge.
How LSA decides who shows up
LSA is still an auction, but your bid is only part of it. According to Google, ranking depends on:
- Your bid, which is the most you are willing to pay for a lead.
- How likely your ad is to produce a lead, which Google judges from:
- your responsiveness to calls and messages,
- what the customer is searching for,
- how relevant your business is to that search,
- whether you accept message and booking leads,
- your profile quality: rating, number of reviews, response time, photos, and the verification checks you have completed.
Google also says higher-quality profiles may pay a lower cost per lead. In practice that makes three things the levers you actually control:
- Answer the phone. Google says missed calls can count against your responsiveness, and responsiveness feeds ranking. A crew that lets LSA calls go to voicemail during the day is paying for it twice.
- Reviews. Rating and review count both feed ranking. Since July 2025, LSA reviews are managed through your Google Business Profile, so every review there counts here. The review acceleration playbook covers how to get more of them.
- An honest profile. List the job types you actually want and the area you actually serve. This matters more than it used to, for a reason covered in the credits section below.
Bidding and budget
You set a budget, and you choose how bidding works:
- Maximize leads. Google sets your bid to get as many leads as it can for your budget. This is the mode Google recommends.
- Set a maximum per lead. You cap what you will pay for a lead, and you may pay less than your cap.
Not every job is worth the same to you, which is why some contractors bid differently by job type or area. We walk through that in how to set LSA bids by service type and ZIP code.
Lead credits: what Google refunds now
You are only charged for leads Google considers valid, and Google screens leads when the customer first makes contact. After that:
- Charged leads keep being reviewed. If Google later decides a lead was low quality, it credits it automatically. Google says credits usually land within 30 days. The original charge still shows on your invoice.
- Some leads are no longer credited at all. Google no longer credits leads marked "job type not serviced" or "geo not serviced." If your profile says you do a job or cover an area you don't, those leads are yours to pay for. Keep job types and service area accurate.
- You can still flag a bad lead. Open the lead and use "Rate this lead" to send feedback.
Each lead shows a charge status in your leads list: charged, not charged, in review, or credited.
LSA is moving into Google Ads
Google is moving Local Services Ads inside Google Ads as Performance Max campaigns with pay-per-lead goals. The first phase started in August 2026 for select US home and storefront service advertisers, including plumbing, HVAC, electrical and pest control. Broader groups follow in late 2026, and other countries and categories in 2027.
What moves with you automatically: your service areas, job types, budget, ad schedule and photos, your lead history, and your verified status and badge.
What does not: your Local Services Ads performance reports. Google says they will not transfer to Google Ads. You get an email 14 days before your account moves. Download your reports before then, because that history is the only record of what LSA has cost you by job type.
LSA vs search ads
| Local Services Ads | Search ads | |
|---|---|---|
| You pay for | A lead (call, message, booking) | A click |
| Targeting | Job types and service area | Keywords you choose |
| Position | Top of the page | Below LSA |
| Entry | Business verification required | Anyone with an account |
| Ranking | Bid, responsiveness, reviews, relevance, profile quality | Bid and ad quality |
| What you control | Profile, responsiveness, bid, budget | Keywords, ads, landing pages, bids |
Most contractors do best running both: LSA for the high-intent "near me" searches, and search ads for the jobs and areas LSA does not cover. If you are in roofing, we cover that setup in how to structure roofing Google Ads and LSA.
How to tell if LSA is working
LSA reports its own lead count, and it is easy to read that number as the whole story. It isn't.
- Credited leads drop out of the count. A month with a lot of credits looks like fewer leads even if the phone rang just as often.
- A lead is not a job. LSA tells you someone called. It does not tell you whether you quoted, won or got paid.
- LSA spend sits inside your Google Ads total. If you judge "Google Ads" as one number, LSA and search are being averaged together.
The fix is to track LSA leads through to booked jobs in whatever system you quote from, then judge cost per booked job rather than cost per lead. Our conversion tracking report found that 27.4% of the home services businesses we could confirm were running ads had no conversion tracking of any kind. LSA gives you a lead count even when nothing else does, which is part of why it gets judged on the wrong number.
If you want a second opinion on your setup, we manage Local Services Ads for contractors, and our free audit checks what your account and website can actually measure.
Sources: Google's Local Services Help and Google Ads Help pages on screening and verification, the Google Verified badge, ad ranking, automated lead credits, and the Local Services Ads transition to Performance Max, read 14 October 2026. Google changes these programs often; check the current help pages before acting on a specific rule.