Local Services Ads vs Google Ads: which one is cheaper for a Texas home service business?
Local Services Ads averaged $53 a lead against $104 for Google search ads in a 2026 benchmark, but you give up control. What a Texas trade should run first.
On the published numbers, Local Services Ads are cheaper per lead. SearchLight Digital is a company that sells revenue data to home service contractors. It tracked $6.72 million of Local Services Ads spend across 888 contractors and 126,650 leads in February 2026, and the average lead cost $53. Its figure for Google Ads search, from January 2026, was $104 blended and $149 for non-branded search (SearchLight Digital).
Cheaper per lead is not the same as cheaper per job, and the price comes with a catch. You give up keywords, ad copy, the landing page and most of your say over a bad lead. Here is the comparison for a Texas home service business, and what changes now that Google is moving Local Services Ads into Google Ads.
The short version
- Local Services Ads averaged $53 a lead in SearchLight Digital’s February 2026 data, against $104 for Google Ads search in its January 2026 data. Both come from one vendor’s client set, and the page does not state the geography.
- Local Services Ads charge per lead and rank you on your bid and your profile quality, which Google says includes your rating, number of reviews and average response time.
- Texas does not require a licence for general contractors, but electricians, plumbers and air conditioning contractors are licensed by the state, and Google checks licences where local law requires one.
- Google no longer gives credits for leads marked “job type not serviced” or “geo not serviced”, so loose category and service area settings cost money that is not refunded.
- From August 2026 Google began moving US Local Services Ads accounts into Google Ads as Performance Max campaigns with pay-per-lead goals. Manual bidding goes, and the old campaign reports do not carry over.
- Our recommendation for a licensed Texas trade doing same-week jobs is to start with Local Services Ads and add search for everything those ads cannot reach.
What is the difference between Local Services Ads and Google Ads?
Local Services Ads charge you for a lead, such as a phone call or a message. Google Ads search charges you for a click. Everything else follows from that billing difference.
| What differs | Local Services Ads | Google Ads search |
|---|---|---|
| You pay for | A lead: a call, message or booking | A click |
| Targeting | Service category and service area | Keywords, match types, negatives, audiences |
| Your creative | A profile with reviews and photos | Headlines and descriptions you write |
| Where the customer lands | Google’s own call and message flow | A page you own |
| What decides your position | Bid and profile quality | Bid and ad quality |
| What you can see | Each lead | The search behind each click |
With Local Services Ads there are no keywords and no ad copy. Google says its auction orders profiles by bid and overall profile quality, and that profile quality reflects your rating, number of reviews, average response time, photos and the verification checks you have completed. It also says missed calls may count against your responsiveness (Local Services Help).
With Google Ads search you pick the queries, exclude the ones you do not want, write the ad and send the click to your own page. The search terms report then shows the searches that triggered your ads, apart from low-volume terms Google leaves out for privacy (Google Ads Help).
One naming change is worth knowing. Google has replaced its older Local Services badges with a single Google Verified badge, and has ended the money-back guarantee that came with the Google Guarantee badge (Local Services Help).
Which one costs less per lead?
Local Services Ads, in the one dataset that compares both. The table puts SearchLight Digital’s February 2026 figures next to the search benchmarks WordStream and LocaliQ publish.
| Trade | Local Services Ads, cost per lead | Google and Microsoft search ads, cost per lead |
|---|---|---|
| All trades in the set | $53 | $90.92 |
| Electrical | $39 | $93.69 |
| HVAC | $51 | $127.74 |
| Plumbing | $57 | $129.02 |
| Roofing and gutters | Not reported | $228.15 |
The left column is from SearchLight Digital: 888 contractors, 126,650 leads, 1 to 28 February 2026, weighted by spend. The right column is from LocaliQ’s home services report, which covers 3,211 US search campaigns from 1 April 2024 to 21 March 2025 and reports medians (LocaliQ). The newer all-industry report gives the same $90.92 for home and home improvement, at an $8.33 cost per click (LocaliQ 2026 benchmarks).
Read the table with three cautions. The two columns come from different companies, different periods and different definitions of a lead. Both companies sell marketing services. And neither publishes a Texas-only figure, so treat the numbers as a starting line for Houston or San Antonio and measure your own after sixty days.
The same SearchLight page reports that 43.9 percent of Local Services Ads leads booked. A lead price only means something next to a booking rate, which is why the comparison to run on your own account is cost per booked job.
A search account can also sit a long way from the benchmark. Take one lead generation account managed here, over the 29 days from 6 February to 6 March 2023. Google Ads recorded 2,410 conversions at £19.21 each from £46.3K of spend, at an average cost per click of £0.57. That is one account, in pounds, in a different market. Its conversions are enquiries and not customers, so it is no forecast for a Texas trade. The fuller argument about benchmarks, including the ceiling your own margin sets, is in the Google Ads cost per lead benchmarks.
Photo: Anıl Karakaya on Pexels.
Can a Texas trade run Local Services Ads at all?
Only if Google lists your category for your area and the business passes screening. Google says every business has to pass a screening and verification process, which varies by category and location and may include background, business registration, insurance and licence checks (Local Services Help). In the United States, plumbers, electricians and HVAC businesses also have background checks on the workers who go into homes, and licences are checked where local law requires one (Local Services Help, US requirements).
Texas makes the licence question uneven, because the state licenses some trades and not others. These are two separate questions: what Texas requires of you by law, and what Google asks for before it will show your ad.
| Trade in Texas | State licence | Who issues it |
|---|---|---|
| General contracting | Not required by the state. Cities and counties may set their own rules | Local authority, where one applies |
| Electrical | Required | Texas Department of Licensing and Regulation |
| Air conditioning, heating and refrigeration | Required | Texas Department of Licensing and Regulation |
| Plumbing | Required | Texas State Board of Plumbing Examiners |
| Fire sprinkler | Registration required | Texas Department of Insurance, State Fire Marshal’s Office |
| Water well drilling | Required | Texas Department of Licensing and Regulation |
The first row follows the state’s guide. General contractors are not required to get a licence to practise in Texas, and may be subject to county or city requirements (Office of the Texas Governor, Business Licenses and Permits Guide). The same guide names the agencies for the other rows. The regulators confirm the three largest trades. Anyone doing non-exempt electrical work in Texas must be licensed (TDLR, electricians). Contractors who install or repair air conditioning, refrigeration or heating must hold a TDLR licence (TDLR, air conditioning and refrigeration). Plumbers are licensed by the Texas State Board of Plumbing Examiners.
So the first step for a Georgetown roofer or a San Antonio plumber is a paperwork check, and the budget decision comes after it. If the licence or the certificate of insurance Google asks for cannot be produced this week, search is the channel this quarter.
What happens when a lead is junk?
Less than you would like. Google’s models now review leads automatically. Leads judged invalid at first contact are not charged, charged leads are reassessed over time, and credits usually reach the account within 30 days. Google also states that it no longer supports credits for “job type not serviced” and “geo not serviced” leads (Local Services Help).
That last point is the expensive one. If your categories or service area are set wider than the work you take, you pay for the leads that result. Rate every bad lead and give the reason, then tighten the job types and the area.
Google Ads handles junk differently. You see the search, add it as a negative keyword, and stop paying for it. It is manual work, and the list keeps paying off for as long as the account runs.
Photo: Ksenia Chernaya on Pexels.
What changes when Local Services Ads move into Google Ads?
The dashboard goes and the billing stays. Google is migrating existing Local Services Ads campaigns into a Performance Max campaign type built for pay-per-lead goals, in three phases (Google Ads Help).
| Phase | Who moves |
|---|---|
| August 2026 | Select home and storefront service advertisers in the United States, including plumbing, HVAC, electrical, appliance repair, house cleaning, lawn care, roofing, pest control and moving |
| Late 2026 | Service-area businesses without a storefront, and accounts with custom bidding or booking setups |
| 2027 | Accounts outside the US and the remaining categories |
According to the same page, four things stay as they are. You still pay only for valid leads. The ads still show only on Google Search and Google Maps. Targeting is still by category and service area, with no keywords. And your past lead history transfers.
Three things change (Google Ads Help):
- Manual bidding goes. Setting a maximum cost per lead by hand is no longer supported.
- One target per campaign. If you ran different targets for different verticals, Google calculates a single campaign-level target and applies it to all of them.
- Old performance reports do not migrate. After the move you cannot open the old dashboard. Google says a download of historical reports is coming and suggests screenshots if you need them now.
If you have been setting your lead price by hand, that control is going. Automated bidding works from the leads it can see, so the lead ratings and booked-job data you feed it matter more after the move.
Which should a Texas home service business run first?
Our recommendation is Local Services Ads first if you are eligible and the work is the kind people book the same week. Start with search if your category is not covered, if the buying decision takes a month, or if you need to say something specific about your business.
Local Services Ads have a ceiling. Their volume depends on how many people search your category near you, so once you are winning a large share of that demand, extra budget has little to buy. Search covers the rest: your own brand name, service lines that do not map to a Google category, and people still comparing options.
In the accounts we manage, running both is usually the better setup, because they sit in different places on the results page. Make sure your call tracking can tell them apart, or the wrong channel gets the credit.
Two limits on all of this. Nobody outside Google can yet say whether the move into Performance Max raises or lowers the cost per lead. So record your current cost per lead and booking rate now and you will have a real before and after. And a test needs a sample. At roughly $50 a lead, a $1,500 month buys about thirty leads, which is our rule of thumb for the minimum needed to read a booking rate.
The bottom line
Local Services Ads cost less per lead and give you less control. Search costs more and tells you what you paid for. Which is cheaper for your business is settled by cost per booked job on your own numbers, so get the tracking straight before your category migrates.
Questions people ask about this
Can a Texas handyman with no licence run LSA?
Only if Google lists the category and the screening can be passed. Texas does not require a state licence for general contractors, so screening rests on the other checks Google runs for the category, such as business registration, insurance and background checks. Start in the LSA sign-up flow, check whether your category appears for your service area, and read what it asks for. If the category is missing or the proof cannot be produced, search is the channel.
What is the difference between Google Guaranteed and Google Screened?
Both were badges Google awarded after its screening, with Google Guaranteed used for home service trades and Google Screened for professional services. Google has since replaced them with a single Google Verified badge and ended the money-back guarantee that came with Google Guaranteed. What still differs by category is the screening behind the badge, so read what your category asks for during sign-up.
How fast do I need to answer LSA calls?
As close to immediately as you can manage. Average response time is part of the profile quality Google ranks on, and Google says missed calls may count against you. Route LSA calls to a phone that is always answered, not the office line. Set the hours in the account to match when somebody can actually pick up, and mark the leads you cannot take rather than ignoring them.
Should I track LSA and search calls separately?
Yes, or the wrong channel gets the credit. LSA calls arrive through Google’s own call flow, so record them from the LSA lead list. Put a separate tracking number on the landing pages your search ads send people to. Then log both against booked jobs in one sheet. Without that split, the channel with the cheaper lead looks like the winner even when it books fewer jobs.
What should I export before my category migrates?
Every LSA performance report you can pull: leads by month, cost per lead, booked rate, lead ratings and any credits. Google says the old campaign-level performance figures do not migrate into the Performance Max version. Save them as spreadsheets with the date, and record your current cost per lead and book rate in one line at the top. That is your before figure for judging the after.
How do I rate a bad LSA lead so it counts?
Open the lead in the account, mark it as not relevant or the closest reason, and add the detail in plain words: wrong service, outside your area, spam. Do it the same day, because the automated review looks at rated leads. You will not get every credit back, and you will get fewer if your category and service area settings were sloppy, so check those first.
What if my LSA leads stop after a slow week?
Check three things in order. Whether calls were missed or answered slowly, because responsiveness moves rank. Whether the review count or rating dropped behind a nearby competitor. Whether the budget or the hours were capped. Fix the phone first, ask recent customers for reviews, then wait a fortnight. LSA volume is capped by nearby demand, so a quiet week can also be a quiet week.
Should I pause search while I test LSA?
No. They occupy different slots on the page and catch different intent, and pausing search removes your brand defence and every query that does not map to a Google category. Keep search running on the terms that already book jobs, add LSA alongside it, and give the test sixty days. Compare booked jobs per dollar rather than leads per dollar.
How do I set a target cost per lead after the migration?
Start from what you can afford, not from the benchmark. Take your average job value, multiply by your book rate, and set the target well under that figure. Then feed the campaign clean conversion data, because automated bidding is only as good as the leads it can see. Change the target in small steps and wait two weeks between changes.
Does a low review score stop me showing in LSA?
It does not block you, but it pushes you down, because your rating and number of reviews are part of the profile quality Google ranks on. A competitor with more recent reviews and a faster phone will sit above you. Ask every finished customer the same week, reply to every review, and watch the position climb as the count moves. Reviews also decide who the caller picks.
Does LSA reach the Houston suburbs?
Only where your service area includes them and your position holds there. Google takes the searcher’s location into account, so a business based inside the loop may show in Houston searches and vanish in The Woodlands. Set the service area to where you actually work, check the leads by location after a month, and use search campaigns for the suburbs where LSA is not delivering.
How much budget do I need to test either channel?
Enough for a sample that can be judged. The post works through it at roughly fifty dollars a lead: a fifteen-hundred-dollar month buys about thirty leads, which is enough to read a book rate. Below that you are reading noise. For search, plan on the same thirty leads at whatever your cost per lead turns out to be, and give both sixty days before deciding.
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