Google Local Service Ads are a relatively new service being offered by Google in select markets. It matters because these ads completely change the layout of Google’s search results. Local Service Ads will now actually show up above Google Adwords (Pay-Per-Click), Maps & Organic Listings.
Placement of these Local Service Ads is HUGE. They are the BEST of the best real estate that Google has to offer! And, who doesn’t want that big beautiful house on the beach, right?
Looking at the Local Service ads, you’ll notice the company name, phone number (Google’s tracking number, NOT the company’s actual phone number), the number of reviews from Google My Business, and Google Guaranteed.
When the searcher clicks the blue text for “More locksmiths in Miami” they will be prompted to specify exactly what service they need the business to provide.
Take our locksmith example. You’ll see the following options:
Finally, it asks the user for their zip code.
Google will then return a list of businesses who perform the service in the zip code specified.
In our example, we went from quite a few locksmiths available to just two.
From here, the Googler can choose to call the business or click on the company name to view its entire profile.
The profile will list the service categories that the business handles, service area, background, licensing information, highlights, and reviews.
Depending on what country your business is located in, you might find differences in which categories are live for LSAs.
For instance, here are the screenshots for all business categories available in the United States:
If you’re up north in Canada though, you may be limited to advertising if you’re in the following industries:
I know why I do.
However, why on earth would Google jump in on this strategy too? I believe it’s 100% about tapping the $500 billion dollar services industry. The space I’ve been working for the past decade or so…
I believe Google is JUST starting with the five categories previously mentioned. They want to capitalize on the revenue that Home Advisor, Angie’s List and even Amazon Home Services are generating doing the same thing. Plus, I think Google has an even more devious plan long term, but only time will tell.
Only paid ads used to appear along the top and the right side of organic search results and maps. Then Google decided to remove the PPC ads on the side and put them at the bottom of the organic listings.
Now, the first two things you see when you search Google are Local Service Ads and then AdWords. Wouldn’t you know it, these two categories just so happened to be paid for Google services. After that, free maps and organic listings appear.
We all have to make money somehow, and Google is no exception. I suppose the difference is, if you provide a popular service in a major metropolitan area and you want to be found first on Google, you’ll have to spend money to make money. Organic hits just put you further down the page these days.
Don’t forget about mobile search, where Local Service Ads and AdWords are even more dominant. Essentially, all the results you’ll see on your smaller screen are LSA (Local Service Ads) and a partial AdWords ad.
You either get invited to play the game or you sit the bench and join the waiting list.
Google contracts with a third party to run a background check on you and your employees. Really, anyone who visits a customer’s home or office to perform services must complete a background check. Licenses get checked. Insurance gets verified.
Once your company is approved and Google Local Service Ads are active in your area, you’re able to receive new leads. You’ll pay on a per-lead basis.
I’ve personally seen and heard of prices from $18 to $45 per lead so far. Expect this to grow over time. Early adopters of LSA will be rewarded handsomely for jumping onboard from the get-go.
Also, whether you receive calls or web form leads, the price is the same.
So, you’ve determined Google Local Service Ads are in your area and you work in an industry they feature. You threw your hat in the ring, passed Google’s background check, and decided the cost per lead was a manageable business expense.
Now what? Well, you’ve got to give Google some parameters on how to spend your money and keep an eye on what they’re giving you in return. Three key points to remember are:
There are 3 Local Service ads showing for “Miami locksmith”, and there are over 30 Miami locksmith’s using LSAs.
So how does the ranking process work? How do you get to be first in line?
Based on our research there seem to be three main factors:
Interestingly enough the city listed on the LSA isn’t necessarily the actual address for the business. LSA defines ‘location’ as: “Your home city will be displayed. This is either the address of your business or the city where you live or work, based on what you entered during sign-up.”
We know that proximity, aka, how close you are to the searcher is a ranking factor. Obviously, entering the largest city in your area will get you in front of the biggest volume of searchers.
To be frank, with all of LSA’s strict onboarding criteria and process I’m surprised they are giving so much leeway on location for these business ads.
Source: Tom Waddington wrote up this great post about the city as it is being used in LSA listings that’s worth your time to check out.
Basically, this flexibility leaves the door open for businesses to defy geolocation if they’re trying to build a presence in a larger nearby city. While it may be good for the business, it may not be as good for a consumer looking for a nearby tradesperson to do the work.
We’re fortunate enough to have some awesome customers. Customers who were willing to share with me and you what’s going on with their Local Service Ads.
One of the biggest questions we receive about the new service relates to the cost per lead compared to AdWords, or how much volume is actually available.
I promised the customer not to share the EXACT location they are in or the EXACT vertical/category of their business.
But let’s be real. There’s really only 17 markets where Local Service Ads (LSA) is live currently, and 5 categories or niches. So if you’re pretty smart, I’m sure you can figure it out ; )
Alright, here we go…
We are going to compare apples to apples in one city:
In the blue corner, we have Google AdWords. Fighting out of the red corner, it’s Google Local Service Ads.
Cost Per Acquisition CPA (Last Month)
Google AdWords: $50.90
Google Local Service Ads: $18
Volume Of Leads (Last Month)
Google AdWords: 37
Google Local Service Ads: 102 total billable leads (Google scrubbed 20 bad leads)
Here’s a little visual of the 102 leads from inside the LSA account.
You’re seeing what I’m seeing right? More volume, lower CPA for LSAs. I suppose the next stat to compare side by side would be conversion rate, but that’s a topic for another post.
If you are a home services company or work with a home services company that understands their numbers, you’re forward thinking, and you’re willing to spend money on advertising that converts, LSA is an absolute no-brainer!
Consider the results shared from our case study above.
Currently, LSA is by invite only, in the markets LSA is live.
If you are in a business category that is located in a market where LSA isn’t live yet go and get yourself added to the waiting list right now.
But, if you’re lucky enough to be located in a market where LSA is LIVE, sign up now!
Follow the easy step by step process and you’ll soon be on your way to LSA traffic (or contention when it opens in your location).
A great place to keep updated on which business categories and locations are live for Google Local Service Ads is in this post. It has a “bad ass” Google Data Studio embed that you can use to search business categories and locations for active LSA markets. Of course Tom Waddington wrote it up, so you know it’s solid.
Scroll down to near the bottom of the post and look for this image and click away to get the results you need.
Early adopters, like our client featured in the case study, and the ones we’re helping get onboard with an LSA account will reap the rewards.
We believe just like AdWords when they first started, that leads are cheap, and there STILL really isn’t any competition compared to what it will be like in the near future.
We’ll update this post regularly as things continue to change and evolve with LSA. Please let us know in the comments below if there’s any information of value we missed or if you hear of new developments we should add.