Google Local Services Ads Cost: What You Pay For and How to Read It

Search for what Local Services Ads cost and you'll find plenty of numbers. They come from agencies, vendors and comparison pages, and they disagree, often by a lot. I'm not going to add to the pile or quote any of them. Google does not publish a price per lead, and for good reason. There's no single price to publish.

What Google does publish is how the charging works. That's enough to work out the number that matters, which is what Local Services Ads cost your business per booked job. Below are the rules, the budget math, the bad leads, and how to read your own results after one month.

Why there is no price list

Google's help page puts it in one sentence: lead prices may vary depending on your location, the job type, the type of lead, or your bidding mode. Each of those can move the price on its own. A lead in a dense metro may not cost what one in a small town costs. A drain cleaning request may not cost what a full system replacement does, and a phone call may not cost what a message does.

Put four moving parts together and any published figure describes somebody else's account. Maybe it's close to yours. Maybe it's off by a multiple. Treat an online estimate as a reason to test, not as a forecast.

What you are charged for

The rule is short. In Google's words: “You're charged for each valid lead you receive through your Local Services ad.” Leads that Google determines to be invalid or low quality are not charged. You don't pay for impressions, and you don't pay for someone who looks at your listing and leaves.

A charged lead is not a booked job. It isn't even necessarily a good conversation. A valid lead can be a price shopper, a homeowner calling four companies at once, or someone who wants a job you'd rather not do. Google's filter removes what it judges invalid or low quality, and everything after that, from answering the phone to winning the job, is on you. That's where most of the real cost of a lead gets decided.

Calls and message leads

Leads come in as different types, and Google says the type of lead is one of the things that changes its price. On messages it gets more specific: “Message lead price is based on the customer's estimated likelihood to book your business.” So a message lead's price depends on how likely Google estimates that customer is to book with you, not on a fixed rate.

Don't just average calls and messages together and stop there. Split them. Look at what each type was charged and how many of each booked. If messages book well for you, they may be worth their price. If they mostly go quiet after the first reply, your cost per booked job from messages will show it long before any average does.

The weekly budget and the monthly ceiling

You don't set a price per lead. You set an average weekly budget, and Google turns it into a monthly maximum equal to the average weekly budget times the average number of weeks in a month. Once the monthly max is reached, the ad doesn't appear for the rest of the month.

Say your average weekly budget is $300 (an invented figure, only there to show the math). A year has 52 weeks and 12 months, so a month averages a little over 4.3 weeks. Multiply $300 by 52, divide by 12, and the monthly maximum comes to $1,300. Google's own multiplier may differ slightly from this calendar version, so take the result as approximate.

Now picture a cold snap that pushes most of the month's leads into the first two weeks, and by the 18th you've been charged the full $1,300. From then until the month ends, the ad doesn't appear. Calls for the rest of the month go to whoever is still showing.

The ceiling works in your favor too. You know your worst case for the month before it starts, which is more than you can say for a print run that flops or a lead vendor with an auto-renewal.

Disputing a bad lead

Some charged leads will be junk. A wrong number, a sales call, a request for a job type you never selected, someone far outside your area. Google's process for these is the feedback survey for that lead. You mark it as poor quality there, and where the lead qualifies, a credit is applied automatically. Whether a given lead qualifies is Google's call, not yours.

Keep two limits in mind. Credits are not available in every vertical or region, and Google lists health care, tax specialists and advertisers in EMEA as exceptions. The survey is also per lead, so nobody files it for you in bulk at the end of the month.

• Do it the same day. You remember the details of a bad call on the day. A week later they're vague.
• Say what was wrong. Wrong number, outside your area, a job type you don't offer, a solicitation. One plain sentence beats a complaint.
• Record it in your own sheet. Mark which leads you disputed and which came back as credits. That count is part of your real cost.
• Don't dispute leads you just lost. A homeowner who went with someone cheaper was a real lead, and disputing those muddies the record you rely on.

From cost per lead to cost per booked job

Cost per lead is the figure the dashboard makes easy. Cost per booked job tells you whether to keep paying.

Back to the same invented month (still not a benchmark). Thirty leads came in. After Google's own filtering and the credits on your disputes, 26 were charged, for the full $1,300. That's $50 per charged lead. You reached 22 of them, quoted or scheduled 15, and booked 10, which works out to $130 per booked job.

Now hold that against what a job leaves you. If your gross profit on an average job is $400, a $130 cost per booked job leaves $270 to cover everything else. If it's $150, the same month barely paid, and that's before the time spent on the 16 charged leads that never booked. Use gross profit, not the invoice total. Revenue is not what you keep.

The gap between 26 charged leads and 10 booked jobs is where you have the most control. A lead you didn't answer or call back is the most expensive kind, whatever Google charged for it. Pick up faster, call back missed calls within minutes, reply to messages while the customer is still looking. Each of those lowers your cost per booked job without touching a single setting in the ad.

Reading your own numbers after one month

Once a full month is in, sit down with the lead list and a sheet with one row per lead, and work through these questions in order.

1. 1Did you hit the monthly maximum, and on what date? If you hit it early, the ad was off for part of the month, and the budget is sized for a quieter month than the one you had.
2. 2How did calls and messages compare? What each type was charged, and how many of each booked.
3. 3Which job types brought the bookings? Lead prices vary with the job type, so a job type that brings expensive leads and few bookings is a candidate to drop from your settings.
4. 4How many bad leads, and how many credits? Count the leads you disputed, the credits that came back, and the bad leads you never got around to disputing.
5. 5How many leads did you reach? If that's well short of the charged leads, the problem is in the office, not in the ad.
6. 6What was the cost per booked job, and how does it compare with your gross profit per job and with your other sources? That number makes the decision.

One month is a first reading, not a verdict. A storm, a holiday or one slow week can swing it. Run the same sheet for a season before deciding, and compare it with the same figure from your other sources. Still weighing pay per lead against pay per click? The comparison of Local Services Ads and standard search ads walks through that choice, and the Google Ads for home services guide shows how to build the search side.

What the search data says about the question

Interest in the product is big and fairly steady. In Google's Keyword Planner, “local services ads” was searched between 33,100 and 60,500 times a month in the US over the eleven months below.

The low point was November and December, the high points June and August. My read, which the figures don't prove, is that a lot of owners look into the product as their busy season approaches instead of during the quiet months. That's the wrong order if verification and a first month of testing are still ahead of you.

For “google local services ads cost”, the top-of-page bid range Google reports is about $48 to $202. Those bids come largely from agencies and vendors trying to reach an owner who's asking this question. That's a fair reason to be wary of any cost figure printed next to a sales pitch, and another argument for the figure from your own month.