Local Services Ads (LSAs): A Complete Guide

Google’s Local Services Ads let businesses promote their services to local customers. They appear above traditional search ads and are pay-per-lead, offering a larger reach for less ad spend. But a new Terms of Service update is causing some businesses to opt out.

While many friends and neighbors rely on word of mouth to find a real estate agent or plumber, a whopping 72% of people use Google search to find local services.

For service providers, Google’s Local Services Ads (LSAs) offer a quick and effective way to reach the top of the Google search results and connect with these new customers fast.

However, a recent Terms of Service update is raising privacy and legal concerns for LSA advertisers.

This guide explains how Local Services Ads work, who should use them, and what Google’s Terms of Service update means for you.

What are Local Services Ads?

Local Services Ads are pay-per-lead ads from Google that help local service-based businesses (like plumbers and electricians) appear above all other sponsored and organic results when nearby customers search for services they offer.

(Image: Search engine results for “Phoenix Electricians”)

How Local Services Ads work

Local Services Ads are formatted differently from traditional search ads, highlighting the local business’s phone number, hours, and ratings, appearing above other sponsored results and charging per lead instead of per click.

(Image: Local Services Ads for “Phoenix Electricians”)

After clicking the ad, Google directs the user to a new page:

Here, they can read through your customer reviews and credentials, and then select the particular service request and location to ensure your services align with their needs before calling or messaging you.

No phone call? No problem. You only pay when a new lead contacts you after clicking an ad.

Services qualified to use Local Services Ads

Local Services Ads are available for over 70 types of service-based businesses, which include home services, professional services, education, wellness, pet care, and people care:

Free download: Full list of services

Benefits of LSAs

Local Services Ads offer a host of benefits for service-based businesses. From boosting credibility to a broader reach, here’s why LSAs are worth considering:

1. Trust and credibility

LSAs help build trust with their Google Guarantee or Google Screened badge feature:

The Google Screened badge means the business has been verified by Google through background and license checks.

The Google Guaranteed badge takes this a step further by offering a money-back guarantee for customers who are unsatisfied with their services.

Both assure potential customers that your business has been vetted by Google, which builds immediate trust.

2. Visibility

LSAs have a wider reach than traditional search ads — they sit above the search ads themselves, and are used in voice search queries for Google Assistant.

3. Budget control and ROI

Advertisers only pay per lead, not per click. That means you only pay when a customer submits a request or makes a phone call to schedule an appointment.

4. No keywords, ad copy, or testing to manage

LSAs automatically run based on your service and location, and the ad itself is autopopulated with your business information.

How to get started with LSAs

Are Local Services Ads right for you? Here’s how to get set up:

1. Check eligibility
2. Sign up and create your business profile
3. Verify your license and insurance information
4. Complete a background check (for certain service categories)
5. Set a weekly budget
6. Add business highlights
7. Go live
8. Manage leads on the LSA dashboard
9. Optimize your ad rankings

1. Check eligibility

• Go to the Local Services Ads signup page
• Click “Get started”

• Select your country/region, state, ZIP code, and job category to see if LSAs are available for your industry and area

2. Sign up and create your business profile

• After confirming eligibility, sign up for Local Services by clicking “Get started”

• Fill in your business details, service areas, service types, business hours, add photos, and preview your ad
• If you already have a Google Business Profile, you can create a connected LSA account

3. Verify your license and insurance information

• • Upload proof of business licenses and insurance required in your state or industry

• Google will verify your documents and may require updates if anything is missing or expired

4. Complete a background check (for certain service categories)

• For some businesses, Google requires background checks

• This is done through a third-party company like Evident or Pinkerton, free of charge

5. Set a weekly budget

• Choose a weekly budget based on how many leads you want to receive

6. Add business highlights

• Select features like “Locally owned,” “Satisfaction guaranteed,” or “24/7 availability” to stand out

7. Go live

After Google reviews and approves your profile and documentation, your ads can go live.

8. Manage leads on the LSA dashboard

Once your ads are live, you can manage your leads inside the LSA dashboard on a desktop or through the Local Services Ads app.

It’s important to review and follow up with each lead by either replying via email or text, calling, or declining the job request.

9. Optimize your ad rankings

While traditional PPC ads are ranked using a Quality Score, Local Services Ads are ranked by the quality and quantity of your reviews, business hours, and responsiveness.

Best practices for LSAs

If Local Services Ads are your next step for scaling your local business, here are the top expert tips to ensure you get the best results:

1. Complete your entire business profile

Your Google Business Profile (GBP) and Local Services Ads account are separate yet interconnected entities.

The information across accounts (business name and contact information) should match exactly, and both should be filled out with keyword-rich service descriptions and high-quality photos for consistency and credibility.

While there is less information to include in your LSA account, here are some important steps to optimize your GBP:

• Upload images and videos
• List products and services
• Publish regular updates
• Respond to questions
• Enable messaging
• Respond to Google reviews
• Ask for more reviews
• Review your profile regularly
• Run Google Ads

Further reading: 11 Expert Google Business Profile Optimization Tips (+ Checklist)

2. Encourage reviews

One of the best ways to optimize your LSAs is by encouraging positive reviews and responding to each submission publicly.

A large volume of positive reviews gives you a better chance of ranking highly and increasing your quality leads.

3. Respond to leads promptly

A quick response time is one of the ranking factors Google uses for LSAs. But beyond that, it is good practice for maintaining a positive business relationship and reputation.

4. Coordinate with traditional local SEO efforts

For maximum visibility, maintain a strong search engine optimization strategy. The stronger the website (and the higher the organic rankings), the more trustworthy a business becomes.

4. Expand your job types and service areas if applicable

Make sure to include all the services you offer and locations you serve to reach all potential leads.

Google’s controversial terms update 2025

On April 22, 2025, Google Ads announced a significant update to its Terms of Service for Google LSA advertisers: Google now claims ownership of all advertiser content in Local Services Ads, including the right to record, analyze, and use phone calls from potential customers.

This update applies across all Google products, platforms, services, and even affiliates.

What does this mean for advertisers?

The updated terms give Google the right to analyze call data for more than just lead quality, including your pricing, services, and discounts, and sensitive client information.

Private details like pricing could suddenly influence pricing models and bidding for advertisers based on their revenue.

Existing advertisers needed to opt into the new terms by June 5, 2025, in order to maintain ad eligibility.

But for many YMYL (Your Money or Your Life) industries like attorneys and medical professionals, the new terms go against client confidentiality, meaning LSAs may no longer be a viable option for advertising.

“I think the biggest impact here will be on industries that have some component of confidentiality, like in the medical or legal space,” says HawkSEM Senior Lead Strategist Chloe Derse.

“Industries that deal with sensitive information should proceed cautiously and may need to adjust their processes to avoid confidential information being shared on initial phone calls.”

On the other hand, businesses that adapt to the new terms may be able to use it to their advantage. For example, recorded calls can influence AI Overview results. Writing a call script that touches on the important keywords and bullet points could ultimately result in better visibility in the AIO.

Alternatives to LSAs

While LSAs are a powerful tool for many local service-based businesses, they aren’t right for everyone — especially with Google’s new Terms of Service update.

If LSAs aren’t an option for your industry or values, there are other marketing tactics that offer opportunities for growth.

Traditional Google Ads campaigns can help businesses looking to increase leads quickly through targeted ads, a controlled budget, and the ability to reach high-intent audiences locally.

Additionally, local SEO is the practice of optimizing your website and GBP to increase visibility in local search results. It’s an effective way to build trust and increase traffic to your site.

Further reading: Local SEO Guide: Cost, Case Studies + Expert Tips

Using both strategies together provides the maximum return on your investment.

The takeaway

From locksmiths and cleaning services to lawyers and healthcare providers, Local Services Ads are a powerful tool for local service businesses. But like all forms of digital marketing, it doesn’t come without risks.

The latest policy changes indicate a shift toward more data integration and less advertiser control.

So while LSAs may help business owners reach the top of Google, marketers need to stay vigilant and protective of sensitive privacy issues for their customers and clients.

If you think Local Services Ads are the right move for your business but need a little guidance, reach out to HawkSEM.

Our experts can help you navigate a marketing strategy that increases lead generation and revenue with a lower cost per lead, from pay-per-click (PPC) ads to Local Services Ads and everything in between.