If you have looked into paid advertising on Google for your contracting business, you have probably encountered two different products: Local Services Ads (sometimes called Google Guaranteed or Google Screened) and regular Google Ads. Both appear on Google search results. Both cost money. Beyond that, they are quite different, and running the wrong one -- or running neither when you should be running one or both -- is a common and expensive mistake for trade contractors.
This guide explains what each product actually is, what it costs, and which one makes sense for a plumbing, HVAC, roofing, landscaping, cleaning, or general contracting business.
What Local Services Ads are
Local Services Ads appear at the very top of a Google search results page -- above the regular Google Ads, above the organic results, above everything else -- when someone searches for a local service. They appear in a compact card format showing the business name, your star rating and review count, your service area, and either a "Google Guaranteed" or "Google Screened" badge.
Unlike regular Google Ads, you do not pay per click. You pay per lead -- specifically, per verified phone call or message that comes through the ad. If someone sees your ad and does not call, you pay nothing. If someone calls but it turns out to be a wrong number or irrelevant, you can dispute that lead and may not be charged.
The Google Guaranteed badge is available for home services businesses (HVAC, plumbing, electrical, landscaping, cleaning, general contracting, garage door, pest control, roofing, and others). Getting it requires a background check on the business owner and key employees, proof of insurance, and a license verification check. Once approved, the badge appears on your ad, and Google will back service quality claims up to a dollar limit if a customer has a verified problem with work done through the ad.
The Google Screened badge is for professional service categories (lawyers, financial advisors, realtors, and similar). Most trade contractors are in the Google Guaranteed category.
What you are bidding on in LSA is your position within the ad unit. Multiple local businesses with LSA set up will appear in the same set of cards, and Google determines order based on proximity, review count and rating, and your bid.
What regular Google Ads are
Regular Google Ads (formerly AdWords) are the pay-per-click ads that appear below the Local Services Ads on most search results pages, or sometimes at the bottom of the page. They look like organic search results but are labeled "Sponsored."
With Google Ads, you create text ads, target specific keywords, and pay each time someone clicks your ad -- whether they call you, leave, or convert into a customer. You set bids on keywords ("HVAC repair Wilmington NC"), and your ad appears based on your bid amount, your quality score (how relevant your ad and landing page are), and competition.
Google Ads gives you significantly more control than LSA: you choose which keywords to target, what your ads say, what hours your ads run, which cities you target down to the zip code, what budget you spend per day, and what page people land on after clicking.
The tradeoff: Google Ads requires more management and more expertise to run well. A poorly managed Google Ads account can spend a lot of money on clicks that do not convert.
The cost comparison
This is where most contractors get surprised. LSA and Google Ads have very different cost structures.
Local Services Ads:
- HVAC leads: approximately $35 to $80 per verified lead
- Plumbing leads: approximately $35 to $70 per verified lead
- Roofing leads: approximately $60 to $120 per verified lead
- Landscaping leads: approximately $25 to $55 per verified lead
- Cleaning service leads: approximately $20 to $45 per verified lead
- General contracting: approximately $50 to $100 per verified lead
These are rough market averages as of mid-2026. Costs vary by city (major metros are more expensive), season (HVAC LSA costs spike in summer), and competition. You are paying only when someone actually contacts you through the ad.
Google Ads:
Costs are measured per click, not per lead. Average cost-per-click for home service keywords in mid-sized markets runs $4 to $20 per click. If your conversion rate (the percentage of clicks that turn into calls or form submissions) is 10 percent, you are paying $40 to $200 per lead at those click costs. In competitive markets or for high-value keywords, this can be significantly higher.
The key variable is conversion rate, which depends heavily on your website and landing page. A slow, unclear, or untrustworthy website can turn a reasonable click cost into a very expensive lead cost.
Which one makes sense for your business
The answer depends on where you are in your marketing development and what your specific situation looks like.
Go with LSA first if:
You are new to paid advertising and do not want to manage keyword lists and bids. LSA is relatively simple to set up and run once you pass the background and license verification. The pay-per-lead model is intuitive and the financial risk is limited compared to Google Ads.
You are in a trade category that qualifies for the Google Guaranteed badge. The badge itself has conversion value -- customers see the badge and it increases trust.
Your market is not overly saturated with LSA competitors. In smaller markets and mid-sized cities, the competition for LSA placement is lower than in major metros, and the lead cost is more favorable.
Your review count and rating are strong. LSA position is partly determined by reviews. If you have 40 or more reviews at a 4.5 average, you will typically get better LSA placement than a competitor with 15 reviews at 4.2.
You want leads without building and managing a complex ad account. LSA is lower ongoing management time than Google Ads.
Go with Google Ads if or when:
You need to reach specific customer types at specific times. LSA targets broadly within your service area for your category. Google Ads lets you target the specific keyword "emergency AC repair Wilmington" at 2am on a Saturday -- the highest-intent, highest-value customer -- and run a different ad for "HVAC tune-up deal" in spring.
You have a specific service to promote that is not well-represented by the LSA category structure. LSA works for your overall business category, but it does not let you promote a specific offer or service page the way Google Ads does.
Your website converts well. If your website does a good job of turning visitors into callers and form submitters, the cost-per-lead from Google Ads can be competitive with or better than LSA -- and Google Ads generates traffic to your website, which has SEO benefits that LSA does not.
You have the time or budget to manage it (or have someone manage it for you). Google Ads accounts that go unmanaged tend to degrade. Budget gets spent on irrelevant searches, bid strategies drift, and quality scores drop. If you cannot commit to weekly or at least monthly account review, LSA is lower risk.
Running both
Many established contracting businesses run both. LSA captures the top-of-page position for general local searches. Google Ads captures specific high-intent searches and allows promotion of seasonal offers, specific services, and new service areas. The two products can complement each other because they appear in different positions on the results page and reach overlapping but not identical customer intent.
If your marketing budget is limited, start with LSA and add Google Ads once you have revenue from LSA flowing and a website that converts. Running LSA without a solid website is also a mistake -- if a customer calls from an LSA but then Googles you and finds a weak or missing website, you may lose the lead even after paying for the contact. Google's help center for Google Ads is at support.google.com/google-ads, which covers campaign setup, bidding strategy, and account structure in detail.
What you need in place before running either
Google Business Profile: Your GBP needs to be complete and verified before LSA will work. The information on your GBP feeds directly into your LSA profile. LSA also requires your GBP review count and rating, so a profile with few reviews puts you at a disadvantage.
A website that converts: For LSA, a professional website is less critical to the ad itself but essential for the customer who Googles you after seeing your ad. For Google Ads, a high-quality landing page is the direct determinant of your conversion rate and therefore your cost per lead.
License and insurance documentation: LSA requires verification of your contracting license and business insurance. Have these documents ready before starting the application.
A process for disputing invalid leads: LSA lets you dispute leads that are wrong-number calls, leads outside your service area, and other disqualifying situations. Disputing these is important because you pay per lead and bad leads add up. Google's support documentation for LSA covers the dispute process.
The bigger picture
Paid ads -- whether LSA or Google Ads -- are a short-term lead source. The moment you stop paying, the leads stop. That makes them useful for filling gaps, launching a new service area, or handling a slow season, but they are not a substitute for building organic visibility through SEO and AI search.
The contractors we work with who get the best long-term economics are the ones who use paid ads as a bridge while building their organic and AI search presence. Over 12 to 18 months, the inbound leads from organic search and AI recommendation increase while the dependence on paid ad budget decreases.
Get more leads without burning your budget
We build the website foundation that makes both LSA and Google Ads work better -- and that builds the organic visibility that reduces your dependence on ads over time. Done-with-you, built live on a call, first draft in 24 hours, live in 7 days. Veteran-owned. Wilmington, NC.
Plans:
- Minimal -- $500: Professional website that does not embarrass you when a customer Googles after seeing your ad.
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- Max -- $3,500 plus $400/month: Everything in Standard plus 24/7 AI receptionist so leads from LSA and Google Ads get answered even after hours.
- Super Max -- from $6,000: Custom systems for larger contracting operations.
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