Google Local Services Ads for Contractors: How They Work and What They Cost

Local Services Ads are the listings at the top of some Google searches, above the regular ads, with a badge, a star rating, and a call button. A homeowner searches "water heater repair near me," taps your listing, and calls. You pay for that lead, not for the click. For a lot of contractors this is the first paid ad that feels fair. It still has rules, screening steps, and billing details that catch people off guard. Here's how it works, based on Google's own help pages.

What Local Services Ads are

Google describes the product on its getting started page this way: your ad shows when people search for your services in the areas you choose, customers can call, message, or book with you, and you pay only for leads related to your business and the services you offer.

Per Google's overview page, the ad itself can show:

• Your business name
• A tracking phone number that forwards to your real business phone
• Your location (your address, your city, or the cities you serve)
• Your reviews and average star rating, including Google Business Profile reviews
• Your number of reviews
• Your business hours
• Photos
• A short business bio, for things like "locally owned" or "free estimates"

Since your reviews show right on the ad, your Google Business Profile matters here too. If yours needs work, start with our Google Business Profile checklist.

Google Guaranteed is now Google Verified

If you've heard of "Google Guaranteed" or "Google Screened," those names are on their way out. Google's Google Verified badge page says it is "simplifying our advertiser badging by launching a single badge for all advertisers." That badge is Google Verified.

What changed for you:

• Existing advertisers who completed verification get the badge automatically. Google says their ads keep running and no action is needed.
• New advertisers must pass screening first to earn the badge.
• The money-back guarantee is ending. The old Google Guarantee let customers ask Google for reimbursement if a job went wrong. Google says it is discontinuing that guarantee. Per the Google Guarantee page, customers can still request reimbursement for services booked through Local Services Ads before December 7, 2025, and must file within 30 days of the service being completed.
• Ranking isn't affected by the switch, according to Google's badge page.

So if an older marketing article tells you to "get Google Guaranteed so customers get their money back," that's out of date.

Pre-badge ads

You don't always have to wait for the full badge to start getting leads. Google's getting started page says you can receive leads before earning the badge once you pass preliminary checks. Pre-badge listings show below fully verified providers.

One catch for one trade: Google says pre-badge ads aren't available for garage door services, health care, or locksmiths. If you run a garage door company, plan on completing full verification before you see leads.

Screening and background checks

Every business has to pass Google's screening. The screening and verification page says the process varies by category and location and may include background checks, business registration, insurance, licenses, and minimum review requirements. Here's what that looks like for a US contractor.

Business Profile and registration

• Verify your Google Business Profile. The person completing the checks must be an owner or manager of the matched profile. Google says the status can take up to 24 hours to update.
• Prove the business is registered. In the US, Google uses a D-U-N-S number. If you don't have one, Google accepts a Secretary of State registration, an IRS EIN, or a Department of Revenue registration.
• Pass the business representative check. Google confirms the representative is tied to the business, then its partner Evident checks identity with an unexpired government-issued photo ID. Google says names must match exactly across documents. A nickname on one form and a legal name on another can stall you.

Background checks

For categories that require them, Google says background checks cover three groups:

A few details worth knowing, all from Google's screening page:

• Office staff are exempt. Clerical and customer support staff don't need checks.
• No credit check. Google says the background check doesn't include a credit check or credit pull.
• It's free. Businesses aren't charged for the background check.
• Failing has a waiting period. After a final disqualification, you must wait 30 days to reapply. After a second denial, you wait 180 days. You can dispute errors with the background check partner.
• Re-checks happen. Google says advertisers are re-evaluated regularly and may be asked to repeat some checks. Ignoring a follow-up can cost you the badge, pause your ads, or get the account suspended.

Licenses and insurance

Google's requirements page lists what each category needs. For the home service trades we checked (plumbing, HVAC, electrical, roofing, garage door, pest control, house cleaning, and lawn care), it lists general liability and professional liability insurance, plus state-level business and owner licenses where local law requires them. The page labels plumbing, HVAC, electrical, and garage door as urgent categories with added screening.

For the insurance upload, the screening page says the document must:

• Be valid for at least 14 days after you submit it
• Show a policy number
• Be legitimate and non-editable
• Show a business name that matches the name you advertise under (or include a DBA document)
• Show an address that covers your service area

Google says a signed certificate of insurance is the best option. The minimum coverage amount depends on your category and location, and Google shows it on the upload screen. Ask your agent for a fresh certificate before you start, not one that expires next week.

How pay-per-lead works

This is the part most owners want to understand before they sign up. Everything below is from Google's How leads work page.

What counts as a lead you pay for

• An answered call, or a call you return that reaches the customer
• A missed call during business hours where the caller stays on the line for more than 20 seconds
• Text messages, emails, and voicemails from customers
• Booking requests (US and Canada)

Google says it filters out invalid activity, like spam and duplicate contacts, automatically.

The missed-call rule

Read that second bullet again. A missed call during business hours can be a charged lead. Google also says voicemail and automated greetings during business hours count as connected calls and are charged if the caller stays on for more than 20 seconds.

That means a busy plumber who lets calls ring through to voicemail all day is paying for leads and possibly not getting the jobs. On top of that, Google's ad rankings page says missed calls can hurt your responsiveness, which affects how often your ad shows. A missed-call text-back setup at least gives those callers a reply while you're on a job.

One more detail: business hours come from your Google Business Profile. If your ad schedule is different, Google only charges unanswered calls that fall inside both your ad schedule and your business hours.

Repeat calls are free for 15 days

If the same phone number or email contacts you again within 15 days of a charged lead, Google doesn't charge you again. After 15 days with no activity, a new contact from that person becomes a new chargeable lead.

Message leads

Google says message leads are usually priced lower than phone leads, though not always. Messages come through anonymized proxy numbers and email aliases, so reply from the Leads page or straight from the notification.

Bad leads and credits

Google used to let you dispute individual leads. That process has been replaced by automatic credits.

Per Google's lead credits page:

• Leads are judged when the customer first makes contact. If Google's models flag a lead as invalid or low quality at that point, you're not charged.
• Charged leads are re-checked over time. If a lead is later found to be low quality, Google may credit it automatically.
• Credits usually land within 30 days. The original charge still appears on your invoice, so don't panic when you see it.
• Some reasons no longer qualify. Google no longer gives credits for "job type not serviced" or "geo not serviced" leads.

That last point matters. If you get calls for work you don't do or towns you don't serve, Google expects you to fix it in your settings. The How leads work page says to adjust your service areas, categories, and service types, with the warning that narrowing them may lower your lead volume.

How to flag a lead

You can still give feedback on any lead:

1. Sign in to Local Services Ads.
2. Open Leads.
3. Select Rate this lead in the top right.
4. Fill out and submit the survey.

Google says this feedback helps it send better-matched leads and that it may occasionally credit leads you report as poor quality. Check the Charge Status column on the Leads page to see whether each lead shows as Charged, Not charged, In review, or Credited.

What it costs

Google doesn't publish a price per lead for any trade. Here's what its help pages do say.

Lead prices

The How leads work page says lead prices vary by location, job type, lead type, and bidding mode. The bidding page adds that when similar local businesses bid on the same lead, those bids set how much the lead is worth. A busy metro with a lot of competing contractors will usually cost more per lead than a quiet rural market, but only your own account will show you real numbers.

Your budget

You set an average weekly budget. Google sets a monthly maximum equal to your weekly budget times the average number of weeks in a month. You can go over your weekly number in a busy week, but never over the monthly max. Once you hit it, your ad stops showing for the rest of the month unless you raise the budget.

Say a roofer sets a $300 weekly budget. With about 4.3 weeks in an average month, the monthly cap lands around $1,300. A slow first week and a storm-heavy second week can balance out, but the roofer won't be billed past that cap. (That's a hypothetical example, not a suggested budget.)

Bidding modes

Google's bidding page lists three:

Google also recommends a minimum budget of 10 leads per week for best results. If that's more work than your crew can take on, use a lower budget and expect fewer leads.

How Google ranks your ad

Per the ad rankings page, listings are ranked by an auction. Your bid is one factor. The others:

• Responsiveness. Answer calls and messages. Missed calls can hurt.
• Relevance. The services you list and your business bio.
• Contact options. Turning on message and booking leads gives customers more ways to reach you.
• Profile quality. Your rating, number of reviews, average response time, good photos, and completed verification.

If you have several locations covering the same area, Google only shows the highest-ranking one.

Reviews show up in two places on that list. That's why a steady flow of new Google reviews helps here as much as it does on the map. Our guide on how to get more Google reviews covers the rules for asking.

Is it worth it

Local Services Ads tend to make the most sense when you can answer the phone during business hours, your licenses and insurance are in order, and you have a decent number of reviews. They make the least sense if calls regularly go to voicemail, since Google can bill for those and count them against your responsiveness.

Before you set a budget, figure out what a booked job is worth to you and how many leads you close. Then compare that to what Google charges in your market after a few weeks of real data.

How Snag fits

Snag doesn't run your Local Services Ads. We handle the pieces that make any lead source pay off: missed-call text-back so callers hear back while you're on a job, review requests after every job to build your rating, and a contractor website that matches your profile. It's $197 a month for the first six months, then $297.