10 critical Google Local Services Ads metrics

Google Local Services Ads (also called GLSA, or simply LSA) put local businesses in front of customers at the moment they need them. Google positions Local Services Ads as a better way to generate relevant, high-quality leads with more conversions than a typical pay-per-click (PPC) ad campaign.

When a user searches for a nearby local business, it’s often to address an immediate need, desire, or issue. Perhaps it’s as simple as looking for a landscaper to spruce up a backyard garden. Another person may need an on-demand home service provider to deal with an untimely plumbing disaster. Whatever the case, Local Services Ads are an opportunity for your clients to stand out right when their services are needed most. These ads show up at the very top of Google search results, and they build your client’s lead generation pipeline. The result is stronger business credibility, more customers, and increased revenue.

Agencies also like that Local Services Ads are one of the most effective ways to springboard clients to the top of Google’s first page without spending hours agonizing over keywords. Since its launch in 2015, Google Local Services Ads have gone international, expanding to more countries, industries, and business categories than ever.

This guide covers how Local Services Ads work, how to set them up for a client, and the 10 metrics that show whether the campaign is paying off.

Key takeaways

• Local Services Ads charge per lead instead of per click, with costs running from $5 to $150 per lead and averaging $20 to $30.

• Clients only qualify after Google’s screening process, which covers background, business registration, insurance, license checks, and minimum review requirements.

• Google Guaranteed backs jobs booked through LSAs with a customer refund of up to $2,000 (also the lifetime coverage cap), while Google Screened confirms the screening without that backing.

• Response rate feeds ad ranking, since Google states that regularly failing to answer calls or respond to messages may affect where an ad shows.

• The average ROAS across Google Ads is around 2x, so a properly optimized LSA campaign should target anything above 3x.

What are Google Local Services Ads?

Simply put, a Google Local Services Ad is a sponsored post for a local, service-based business. These ads appear at the top of organic search results.

They’re prominently displayed with key details like:

• Overall star rating (based on customer reviews)

• Contact information

• Business hours

• Whether they’re Google Screened or have a Google Guaranteed badge

How Local Services Ads work

Let’s say you’re in the middle of a sweltering summer heat wave when suddenly, your air conditioner dies on you. What’s the first thing you do? Probably grab your phone and Google something like “air conditioner repair.”

By searching for “air conditioner repair,” you just told Google you have transactional intent, which is the best kind of intent for your clients since it means you’re ready to make a transaction (like spending money, booking a service, etc.).

Google combines this knowledge of your transactional search intent with your location to serve you ads for local businesses, which appear at the very top of your search engine results page (SERP).

If you’re wondering how a search engine like Google already knows your location, it’s because it’s got a wealth of information on you (such as your GPS or IP address). In fact, Google can usually tell where you are even if you’re using Incognito Mode, because it isn’t as anonymous as you might think (or hope).

So if you were in Tampa, Florida, your search results for “air conditioner repair” might look something like this:

See those ads at the very top, underneath the heading “Repair AC - Over 50 providers nearby”?

Those are Local Services Ads. Notice the commonalities among the top three: high star ratings, the Google Guaranteed badge, and service areas that match your hypothetical location.

Why use Google Local Services Ads?

Is creating a Google Local Services Ad worth the extra effort? You may have been working on ongoing local SEO efforts (or even Google Ads) for your clients, and if their organic listings are already performing well, you might be wondering whether LSAs are really needed.

LSAs are focused on lead generation, but they work differently from your typical Google Ads campaign. Here are the biggest benefits:

• Appear at the top of Google. The dream goal of agencies, marketers, and clients.

• Pay per lead, not per click. Clients only pay when they get a legitimate booking request, which maximizes their budget and makes it easier to demonstrate ROAS. Leads are recorded whenever a customer contacts your client through:

• A phone call,

• Email,

• Text message,

• Booking form, or

• Voicemail message

• Skip the keyword bidding. You don’t have to bid on keywords or phrases. Google Local Services Ads rely on local-sensitive queries, which are only displayed when they align with your client’s service offerings and geographic proximity.

• Reach local customers with high transactional intent. Generated leads are hyper-specific to your client’s business, because ads only show to potential customers looking for services within a specific vicinity. It’s easy for those customers to find and contact your clients directly.

• Capture leads, not just attention. Prospective customers create booking requests or appointments straight from the ad, and the ability to message leads directly saves time.

• Build trust. Getting “Google Guaranteed” or “Google Screened” tells customers that your clients are verified and reputable. Advertisers must undergo extensive background checks to be eligible, which reassures customers they aren’t contacting scammers or nonexistent businesses.

• Control the budget. Set spend levels based on your client’s budget and adjust as needed.

• Manage bookings and availability. Accept and review bookings to create a schedule that works for your clients.

• Stay available 24/7. Receive notifications for new leads and respond quickly through the mobile app (English only).

Please note that some of these benefits are available only in the US and/or Canada. Check this Local Services Help page for more information on managing leads and jobs. To see if Local Services Ads are available in your country and what business categories are available, click here.

How to set up Google Local Services Ads

To get started with setting up Local Services Ads for your clients, here are the steps to follow.

1. Check your client’s eligibility

Google Local Services Ads is available for service-based industries in the following selected countries:

• Austria

• Belgium

• Canada

• France

• Germany

• Ireland

• Italy

• Spain

• Switzerland

• United Kingdom

• United States

Coverage also varies by service category. Here’s the list of service categories available in the US to give you an idea. From acupuncturists to animal rescue, flooring services to funeral homes, there’s a high chance your clients’ industry qualifies for GLSA. Some categories even have sub-sectors, such as real estate lawyers, IP lawyers, and labor lawyers. The list of GLSA service categories in the US is long, but other countries don’t have as many options yet.

Once you’ve confirmed your client’s country of operation, the rest of the eligibility check is simple. Head directly to the platform and fill out details like:

• Location (e.g., specifying countries, states, and zip codes)

• Job types. There’s an extensive list of service categories to choose from, but here are a few to give you an idea:

• Acupuncture

• Hair services

• Home inspection

• Immigration lawyer services

• Plumbers

• Junk removal

• Pet grooming

• Yoga

2. Create your client’s business profile

Next, it’s time to create a profile and fill in your client’s business details. This is an integral part of the overall ad setup and includes the following:

• Business name and telephone number

• Messaging preferences for receiving leads (either email or text message)

• Business owner’s information (name, founding year, and any physical business location), which isn’t publicly displayed to customers

Then, choose the geographic location your client is serving, include further service details, and add business hours. To complete setup, you’ll be given a preview of their Google Local Services Ads (like the example below).

3. Refine your client’s geo-targeting strategy

During the initial ad setup, be sure to define your client’s local target market. The more specific, the better.

Choosing every single town in their state may result in scattered ad spend and marginal results. To get the most out of this exercise:

• Ask your client to provide geographic boundaries and have them decide what’s realistic for their business. For example, a plumbing company may not have enough company vehicles or resources to serve customers in the next town over

• Consider including immediate vicinities in your client’s ad geo-targeting. If your client does have the resources to serve a larger region, it may be feasible to expand their service area and increase brand reach without diluting their advertising efforts

4. Start background checks and verification

To participate in Local Services Ads, businesses need to undergo a screening and verification process. What it involves depends on your client’s location and service category, and it includes things like “background, business registration, insurance, license checks, and minimum review requirements,” according to Google.

To verify the legitimacy of your client’s business, Google uses an independent third party called Evident. While background check requirements differ per country and industry, they’ll generally look into the following:

• Business registration certificates

• Practice licenses

• The presence of any legal concerns (like bankruptcies, criminal records, or compliance issues)

Depending on your client’s country of operation, they may need a verified Google Business Profile.

Consumers trust and rely on Google reviews when making purchasing (or, in our case, lawyer hiring) decisions. A potential client may not find you through your Google Business profile, but they will search for your firm and see your online reviews.

Jason Bland, Co-Founder of Custom Legal Marketing

While it isn’t a requirement for all clients who want to run Google Local Services Ads, it provides a competitive advantage and strengthens online credibility.

5. Get the Google Screened or Google Guaranteed badge

Passing the screening process earns your client a Google Guaranteed or Google Screened badge, which appears next to a green check. These badges are designed to boost online credibility and help potential customers decide on the best local service provider.

If you’re wondering how to choose between the two, here’s a brief overview.

One key difference between Google Guaranteed vs. Google Screened is that Google Guaranteed is used more often by home service providers like plumbing, locksmiths, and HVAC, while Google Screened is more common among professional service firms such as lawyers, accountants, and real estate.

The other major difference is that ads with the Google Guaranteed badge are backed by Google, meaning that if something goes awry with a job booked through LSAs, Google may refund the customer up to a maximum of $2,000 (which is also the lifetime coverage cap). Although a Google Screened business has also been through a screening process by Google, these services are not backed by the Google Guarantee.

6. Decide on your client’s budget and bidding strategy

Next up is deciding on a weekly budget. Based on this figure, Google assigns a cost per lead, which takes other advertisers’ bids into account. You’ll then get an automatic estimate of how many leads will be generated for this budget, though it’s not a guarantee.

It’s possible to end up with a weekly spend higher than you’ve specified, but it’ll never exceed your client’s overall monthly budget. This may happen as a result of Google trying to maximize leads and increase reach on local-sensitive searches.

Once the budget is set, there are two bidding strategies to choose from:

• Assign Google to decide on your client’s cost per lead. This is Google’s recommended option and generates the most leads for your client’s budget. It’s ideal if your client has a healthy budget and can afford a higher cost per lead (depending on their business type and bidding competitiveness). It also takes the hassle out of manual bidding and does some of that heavy lifting for you.

• Set a maximum amount that your client is willing to pay per lead. If your agency has experience with Google Local Services Ads, consider setting a manual bid per lead. This puts the ball in your court and allows you to spend your client’s budget as you see fit. It’s useful to maximize a modest ad spend, run A/B ad tests, or keep within a tight weekly budget.

7. Launch your client’s ads

After your client’s background check has been completed, it’s time to launch their ads and get those leads rolling in. Once ads are up and running:

• Ensure that clients are responsive to incoming phone calls, messages, or customer inquiries. Otherwise, this will adversely affect their ad ranking over time

• Give ads enough time to optimize (usually around two weeks). This enables a more accurate assessment of your client’s Google Local Services Ads performance and helps in making data-informed recommendations (e.g., increasing budget to generate more leads)

10 critical metrics for reporting GLSA

Here are the most important Google Local Services Ads metrics to keep in mind when reporting on GLSA performance.

1. Number of charged leads

This is the number of leads your client received that they were charged for. Monitor the number of charged leads over time and track how it changes to identify trends and uncover new insights to drive strategy.

2. Total amount charged for leads

This one is straightforward. This metric shows how much your client paid in total for the leads generated from Local Services Ads in a given period.

3. Number of bookings

Much like it’s important to track the number of charged leads, it’s important to track the number of bookings that come from those leads. Look for trends, insights, and opportunities.

4. Booking rate

The booking rate is the success rate, or conversion rate, you get from dividing the number of bookings by the number of charged leads.

5. ROAS (return on ad spend)

Monitor ROAS closely when your client starts using Local Services Ads, especially if you’re more used to traditional PPC pricing.

Local Services Ads are a significant change from Google Ads and its PPC model. Instead of spending $1-2 per click, you can pay anywhere from $5-150 per lead with LSA. On average, Google charges between $20-30 per lead.

Calculating ROAS on Local Services Ads

To calculate return on ad spend, divide the revenue generated from the leads by the total amount charged for the leads. The CPL model makes calculating ROAS easier than with CPC or CPM models.

For example, let’s say your client received six leads and booked three jobs worth a total of $600 through Local Services Ads, and Google charged $20 per lead. This gives you:

• ROAS = $600 / ($20 x 6 leads) = 5x

What is a good return on ad spend for Google Local Services Ads?

The average ROAS for Google Ads as a whole is around 2x.

Properly optimized, LSAs tend to deliver a lower cost per lead than Google Search, so the ideal target would be anywhere above a 3x ROAS.

This will vary greatly based on the industry and the amount of time your agency has dedicated to optimizing the campaign.

6. Response rate

Don’t underestimate the importance of the response rate. Once a customer reaches out, your clients need to respond fast, regardless of whether your agency handles it or your clients do it themselves.

Google is direct about this. Google even says, “if you regularly fail to answer calls or respond to messages, your ad ranking may be affected.”

If your clients are unable to provide 24/7 availability, you can set their LSAs to run only during business hours when your client can promptly respond. Another option is implementing automated messages, but be warned that responses can sometimes be robotic and out of context.

7. Lead quality

Keep track of lead quality by monitoring whether a lead was converted or not. Close the successful leads and archive the ones that didn’t pan out to make Google’s algorithms more effective at targeting the right people for your clients.

You can also look at the call duration to help gauge lead quality. Typically, the longer the call, the more qualified the lead.

8. Review score

Consumers are increasingly relying on online reviews before making decisions. In a recent survey, 77% said they “always” or “regularly” read reviews when browsing for local businesses. And only 3% said they would consider using a business with an average rating below 3 stars.

Business reviews are a form of social proof that leads to tangible results. The more reviews your client has, the more reputable their business appears, and the more likely it is that they’ll be contacted by potential customers for upcoming jobs.

Nowadays, it’s all about convenience and saving time, which is what the Google Local algorithm is all about. With a quick search, users can find my clients that are close by and see that they’re trustworthy based on Google reviews.

Abigail Anderson, Account Executive at I4 Solutions

9. Number of reviews

The more reviews your clients have, the better. That’s why it’s so important to get local reviews, especially on Google. Most consumers are smart enough to realize that it is far easier to generate three or four 5-star reviews than it is to generate hundreds of them. Taken with your client’s review score, the number of reviews can vastly improve ad rankings.

As a Google Local Services Ads best practice, gather customer reviews at every opportunity. Whether a customer leaves a 5-star rating or shares a couple of high-quality photos, it goes a long way for your client’s Google Local Services Ad reputation.

The importance of responding to customer reviews

Regardless of the tone of a customer’s feedback, it’s important to be interactive and demonstrate responsiveness to all customer reviews.

Replying to positive reviews indicates that your client values customers’ input and humanizes the business by acknowledging their gratitude for the review.

Addressing negative reviews is an opportunity to acknowledge customer concerns and resolve issues. This boosts transparency and shows that your client takes accountability where necessary.

We respond to reviews frequently on behalf of clients, which is a big missing piece for many local businesses. 89% of consumers say they would be ‘fairly’ or ‘highly’ likely to use a business that responds to all reviews–positive and negative.

Lane Rizzardini, Co-Owner of Marion Relationship Marketing

10. CPL (cost per lead)

Monitoring cost per lead allows you and your clients to set sales goals, calculate expected ROI, and plan advertising budgets. If the number stays consistent and doesn’t change too much, then it’s probably all good. If you start noticing changes, especially if that cost starts to creep up, it might be a sign that Google updated your client’s business category, or that your Local Services Ads are losing their effectiveness.

The cost per lead for LSAs also depends on the location and business category. Either way, you’ll want to make sure the leads being generated for your clients are worth paying for, which ties back into ROAS.

Automating your Local Services Ads reporting

Tracking this data directly through the Google Local Services Ads app or website is possible, but it’s the slow route. What if your client runs paid ads on other platforms? Opening a million tabs, logging into their Google Ads account, and manually piecing together the PPC picture eats billable hours.

This GLSA reporting tool from AgencyAnalytics has an intuitive interface that allows agencies to create a dedicated GLSA report or live dashboard in minutes for client meetings, featuring many of the same GLSA metrics covered above. Data retrieval is automated from over 85 marketing platforms, so there’s no manual assembly.

The GLSA dashboard also allows for real-time monitoring of lead costs so agencies can optimize their clients’ campaigns and budgets on the fly. Don’t stop there. Build a PPC dashboard for your clients to present their GLSA campaign data alongside their other marketing channels and show the full picture of your marketing efforts.

Monitoring these metrics is the only way to understand whether you’re meeting KPIs or OKRs or whether further improvements are needed.

Use a ready-made Google Local Services Ads report template or a customizable Google Analytics report template, and more–try AgencyAnalytics today, free for 14 days.

Read Next: 15 Critical Google Ads Metrics to Monitor Daily