How Google Local Services Ads work for contractors: pay per lead pricing, the Google Verified badge that replaced Google Guaranteed, screening, lead credits, and when they're worth running.
Local Services Ads are the listings with a green check mark that sit at the very top of Google when someone searches for a plumber, an electrician, a roofer or a house cleaner in their area. They work differently from regular Google Ads, and for most home service trades they're the first paid channel we recommend. This post explains how they work, what changed in 2025, and how to decide whether they're worth running.
With regular Google Ads you pay every time someone clicks, whether or not they call. With Local Services Ads you pay per lead. Google's own wording is that you pay only for leads related to your business and the services you offer. A lead is a phone call where you speak with the customer, a voicemail, a text or email message, a missed call you return by text, email or voicemail, or a booking request. Booking leads are only available in the United States and Canada.
You set an average weekly budget based on how many leads you want, and Google won't spend more in a month than that weekly figure times the average number of weeks in a month. Message leads are usually priced lower than phone leads for the same job type.
For years the badge on these ads said Google Guaranteed for home service trades and Google Screened for professional services, and the Google Guaranteed badge came with a money back guarantee for the customer. In 2025 Google replaced both with a single badge called Google Verified, and it discontinued the money back guarantee. Customers had until December 7, 2025 to file the last reimbursement claims. The badge now means that the business passed Google's screening, and Google says the change doesn't affect how ads are ranked. If you still see Google Guaranteed on an old sales deck, that's out of date.
To get the badge you complete Google's screening and verification, which depends on the trade and the state. It generally includes:
Google lets you start running pre-badge ads while the rest of the checks finish, but it places those listings below the businesses that have completed everything. Insurance and license paperwork is where most applications stall, so have the documents ready before you start.
Not every lead is a customer. Some are spam, some are people looking for a job, and some are for work you don't do. Google says its system assesses each lead when the person first makes contact and doesn't charge for leads it decides are invalid or low quality. Leads that were charged get reassessed over time and may be credited automatically if they turn out to be poor, and Google says most credits land on the account within 30 days. You can also give feedback on individual leads. The old dispute reasons for wrong job type and wrong area are no longer supported, so the credit process is mostly automatic now.
Google says ranking depends on factors like how close you are to the customer, your review score and count, how quickly you respond to leads, your business hours, and whether you've had serious complaints. The two you control day to day are reviews and response time. A missed Local Services call that never gets returned hurts your position on the next search, which is one more reason to set up missed call text back on the number you use for the ads.
For most established home service businesses, yes, with two conditions. You need enough budget that the results tell you something, which for most trades is at least a few hundred dollars a month, and you need to answer the phone. The cost per lead varies a lot by trade and market. Emergency plumbing and HVAC leads in a big metro can cost far more than a lawn care lead in a small town, and Google's pricing changes over time, so ask for current figures for your area rather than trusting a number from a blog post.
Local Services Ads also don't replace the free channels. A well run Google Business Profile and a site with a page for each service and town bring in calls without a per lead charge, and they keep working when you pause the ads. We treat LSAs as the paid layer on top of that.
SiteHike manages Local Services Ads for clients on the Booked plan. We handle the account setup and the screening submission, follow up on the license and insurance checks, set the budget and job types, and track every lead alongside the calls from your website and profile, so the monthly report shows what each channel produced. The details are on our Google Ads and Local Services Ads page. If you'd like to know whether LSAs make sense for your trade and area, book a call and we'll look at the numbers with you.
Start with a free audit of your site and your Google listing. It costs nothing and you aren't signing up for anything.