Local Service Ads vs. Google Ads: 3 Key Differences

Local service ads or Google Ads, which is the better fit?

Walk with me.

A Quick Overview: Local Service Ads vs. Google Ads

Local Service Ads (LSAs) are a direct line to local customers actively seeking local services. You’ll find LSAs at the top of Google Search results. They showcase a business alongside trusted reviews and Google Guarantee (a certification program that signifies that Google has vetted and verified the business).

LSAs are designed specifically for service businesses like plumbers, electricians, and house cleaners. Google charges advertisers on a pay-per-lead basis, meaning a local business only pays when a potential customer directly contacts them, typically by phone call.

Google Ads, on the other hand, offers a wider range of ad formats and targeting options, making it suitable for businesses of all sizes and industries. Google Ads allows advertisers to reach a massive audience across Google Search, YouTube, and millions of websites.

Unlike LSAs, Google charges its Google Ads services out on a pay-per-click basis, meaning that a local business pays each time someone clicks on an ad, regardless of whether they take further action on the business’s website.

Still unsure? Here’s a handy table to make the distinction between LSA and Google Ads clearer:

Differences Between LSA and Google Ads

Let’s see how these two contenders stack up against one another.

1. Hyperlocal Targeting

LSAs are designed specifically for service-based businesses in select categories. The main benefit? LSAs allow advertisers to pinpoint a service area down to the zip code level, ensuring ads only reach people physically located within a designated area.

Google Ads? Well, they cast a wider net. Sure, Google Ads does offer location targeting options, but it’s not as laser-focused as LSAs. Advertisers can target specific cities, regions, or even radius around a location, but you’re also relying on keyword targeting to reach the right audience. This means ads might still appear for people outside a service area or who aren’t actively looking for specific services.

So, which platform wins the targeting battle? It depends on a business’s goals and business model. Here’s what I mean by that:

• If you’re a service-based business with a clearly defined service area, LSAs offer unparalleled precision. You’ll only pay for leads from people who are actually in your neighborhood and actively looking for your services.
• If you want to reach a broader audience, Google Ads is the go. Its flexible targeting options allow you to reach people based on their search intent, demographics, interests, and more.

2. The Cost Factor

Let’s talk about the green stuff:

• With LSA, a business only pays when Google connects them with a qualified lead—someone who’s actively searching for your specific services in your area and takes action to contact you.
• Google Ads works on the classic pay-per-click (PPC) model. You bid on keywords, and every time someone clicks on your ad, you pay the piper.

So, how much does each service cost?

For LSAs, CPL (cost-per-lead) tends to be higher than Google Ads CPCs (cost-per-click), but remember, you’re paying for quality leads, not just clicks. The average lead cost sits at around $24. Whereas the average CPC for Google Ads typically ranges from a few cents to several dollars, depending on the industry and the competitiveness of the targeted keywords.

3. Ad Formats and Features

Okay, ad formats and features. What are we looking at here for each advertising service?

Local Service Ads are designed to be simple and packed with trust signals—no flashy gimmicks, just pure, unadulterated minimalism.

Here’s what you get with LSAs:

• A Business’s Name: Front and center, so people know exactly who they’re dealing with.
• Star Ratings and Reviews: Social proof is king, and LSAs put a business’s reputation on full display.
• “Google Guaranteed” Badge: This little badge packs a powerful punch, signaling to customers that Google’s got your back.
• Service Area and Phone Number: Make it easy for customers to see if you serve their area and get in touch with a single click.

Google Ads, on the other hand, offers a smorgasbord of ad formats to suit a business’s every whim and fancy.

• Search Ads are text-based ads. They are the bread and butter of Google Ads, appearing at the top of search results and delivering concise, targeted messages to high-intent searchers.
• Display Ads are banner ads that appear across Google’s vast Display Network. Think vibrant images, animated GIFs, and interactive elements that stop scrollers in their tracks.
• Video Ads showcase your brand’s personality and tell your story through captivating video ads on YouTube.
• Local-Specific Goodies: Google Ads also offers some handy features specifically for local businesses:
  • Call Extensions: Make it easy for people to call your business directly from your ad, especially on mobile devices.
  • Location Extensions: Display your address and a map pin, making it a breeze for customers to find you.

So, which platform wins the style showdown? It depends on your goals and target audience.

If you’re a service-based business looking to build trust and generate leads, LSAs are the way to go. Their simple, standardized format puts the focus on your reputation and qualifications.

But if you’re looking to make a splash with eye-catching visuals or tell a compelling brand story, Google Ads offers a wider range of creative options.

Choosing Your Champion

Okay, we’ve covered the basics, but now comes the real decision: Local Service Ads or Google Ads?

Business Type: Are You LSA-Eligible?

First things first, be sure you can even run Local Service Ads. As I’ve mentioned a couple of times, LSAs are reserved for specific service-based businesses. Find out if you’re eligible here. On the page I just linked to, Google’s got a full list of eligible categories, so be sure to check it out before you get your heart set on those shiny “Google Guaranteed” badges.

Of course, if you’re not in one of those categories, Google Ads is still waiting in the wings, ready to tackle any marketing challenge you throw its way.

Business Goals: What’s Your Endgame?

Your goals should also be a big factor of consideration. Are you looking to rake in those leads, build brand awareness, or drive immediate sales?

• Lead Generation: LSAs are the lead-gen kings. You only pay when someone actually contacts you, so it’s a great way to fill your pipeline with qualified prospects.
• Brand Awareness: If you’re new to the scene or want to boost your local reputation, Google Ads’ wider reach and diverse ad formats can help you get noticed by a larger audience.
• Sales and Conversions: Both platforms can drive sales, but LSAs are particularly effective for service businesses where trust and reputation are key factors in the decision-making process. Google Ads, on the other hand, can be a powerhouse for eCommerce businesses or those with a broader range of products or services.

Ad Spend: What’s Your Budget?

Let’s be real: budget matters.

• Tight Budget: LSAs might not be your best bet if you’re working with limited funds. Sure, the pay-per-lead model means you only pay for actual leads, not just clicks. But this is only one side of the story. LSA CPL doesn’t come cheap for many industries. If profit margins allow, be my guest and run LSAs. If not, Google Ads might be the go.
• Larger Budget: If you’ve got some marketing muscle to flex, why not run both LSAs and Google Ads? Google Ads will open up a world of possibilities, allowing you to experiment with different ad formats, target a wider audience, and scale your campaigns as needed. While LSAs will scoop up the high-quality leads that are ready to buy now.

Conclusion and Next Steps

Feeling a bit overwhelmed by all the options? Don’t sweat it.

At Loganix, we live and breathe this stuff and are more than happy to help you out where we can.

So, if you’re ready to dominate the local search scene and attract a flood of qualified leads, head over to our PPC management services page, and let’s get this thing started.