Google gives local businesses two main ways to generate PPC leads online: Local Services Ads (LSAs) and Search campaigns.

LSAs are pay-per-lead campaigns – for actions such as calls, messages, or booked appointments – with a quick setup process that involves verifying your business. After that, Google automates most of the ad and keyword setup.

Search campaigns are more complex but offer far greater control over ad copy, keywords, and optimization.

Understanding how each format works – and when to use them – can help you get more qualified leads and make smarter use of your ad budget.

Most advertisers use both and shift budgets based on which delivers better long-term results.

Getting started with Google Local Services Ads

LSAs work for businesses of all sizes, not just those with small budgets.

For small business owners, LSAs offer an easy way to set up and run ads quickly. 

This is one of the few ad formats where following Google’s setup instructions can actually work well. 

That’s not the case for Google Search campaigns, which are far more complex and often waste spend when relying on Google’s automated suggestions.

Small businesses can prepay a few hundred dollars to test results. 

While LSAs offer fewer options for control, customization, or optimization, they can work well for very small budgets. 

They don’t require as much active management as Search campaigns – though they aren’t completely “set it and forget it” either.

Larger companies can also benefit from testing LSAs alongside other ad formats to compare results. 

However, not all industries are eligible, so always confirm availability before allocating budget.

During setup, review all details carefully – including company information, service areas, and specific services – rather than assuming Google configured them correctly. 

You have limited control over ad copy and keywords, since Google automatically determines relevant terms. 

As Google’s documentation notes, “there is no need to do keyword research as relevant keywords are automatically determined by Google.” 

This can work in your favor – or lead to irrelevant traffic – because you can’t define your own keywords.

Reviews are especially important in this format, as they appear prominently and heavily influence results. Collecting legitimate, high-quality reviews is critical for success.

To evaluate performance, connect third-party tools to track and qualify leads. 

A basic CRM can help you measure how many leads convert into customers. 

Platforms like HouseCall Pro and ServiceTitan can also integrate booking features, letting customers schedule appointments directly through your LSAs.

Dig deeper: Advanced Google Ads tracking for local service companies

Getting more from your Google Search ads

Google Search campaigns are more complex but offer a wider range of features for setup and optimization. 

On top of setting business hours, target areas, and other details, Search campaigns give you greater control over ad testing, assets, keywords, match types, bidding strategies, and more.

Testing with just a few hundred dollars is not recommended. These campaigns require active monitoring and frequent optimization to perform well over time. 

Unlike LSAs, you can add negative keywords and test a wide range of terms to identify which are most effective and profitable. 

A/B testing ad copy and landing pages is also possible, giving Search campaigns much more scalability.

When starting, test a small budget using phrase and exact match keywords only, even with manual CPC bidding to set your maximum bid per click. 

This offers tight control for new accounts, though it’s typically a temporary setup before switching to automated bidding and broader match types. 

With larger budgets, you can immediately use automated bidding and broad match keywords.

Begin with broad match keywords using a Maximize Conversions bid strategy, then add a target CPA (tCPA) once performance data builds.

In industries with high CPCs, set up portfolio bidding to include both a tCPA and a maximum CPC bid. 

Microsoft Ads includes this option natively in its tCPA setting, so portfolio bidding isn’t required there.

After running a Search campaign for two to three months, begin expanding and refining based on performance. 

Add new campaigns and ad groups to test additional keyword and ad combinations, aligning each with specific landing pages to maximize lead generation – something not possible with LSAs.

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Combining LSAs and Search campaigns for stronger results

As with any advertising channel, it’s essential to regularly evaluate lead quality using a CRM and call tracking tools, such as CallTrackingMetrics or CallRail. 

When running both LSAs and Search ads, compare leads from each to assess performance. 

LSAs often face lead quality issues, despite being pay-per-lead campaigns. 

Google continues improving spam filtering and invalid lead detection for LSAs, but the system still isn’t perfect. Invalid leads can be disputed.

Ad positioning also differs between the two formats. LSAs typically appear at the top of the page, though fewer of them are shown compared to Search ads. 

Showing in multiple placements isn’t a problem, but you should continually evaluate cost per lead, lead quality, and lead-to-customer conversion rates for both formats.

Dig deeper: How to expand your reach with reverse location targeting in Google Ads

Expanding beyond LSAs and Search campaigns

For larger budgets, several other Google Ads campaign types are worth testing. These can support lead generation directly or help build local brand awareness.

Display, Video and Demand Gen campaigns can generate leads on their own or build brand awareness for top-of-funnel audiences. 

They work well for higher-priced products or services with longer sales cycles, and for lower-priced services that rely on staying top-of-mind – such as plumbing or AC repair.

Performance Max campaigns can also deliver strong lead volume.

However, because they extend beyond Search, it’s essential to monitor lead quality through your CRM and compare it against Search and LSA performance.

With Google Analytics and Google Ads tracking multiple touchpoints before a conversion, you may see fractional conversions.

For example, 0.5 for a Video campaign and 0.5 for a Search campaign – indicating that both contributed to a single lead. 

While not a perfect system, this data provides useful context for how different campaigns interact across the customer journey.

Test and compare

Both small and large businesses can benefit from testing LSAs, and all should consider running them alongside Search campaigns to compare results. 

There’s no one-size-fits-all approach – both formats can be profitable when properly tracked and optimized.

Dig deeper: Google Ads for SMBs: How to maximize paid search success