Local Services Ads for Contractors: How Pay-Per-Lead and the Google Verified Badge Work

When a homeowner searches for a plumber, roofer or HVAC company, the first results they see are often Local Services Ads: a row of businesses with ratings, a phone number and a verification badge.

For contractors, these ads have a major appeal. You pay for leads, not clicks. But Local Services Ads have changed significantly over the past year. The old "Google Guaranteed" badge is gone, and in 2026 Google began moving the program into the main Google Ads platform.

This guide explains how Local Services Ads work now, what changed and how to get better results.

Local Services Ads are a Google ad format for local service businesses. They appear on Google Search and Google Maps, and customers can call or message your business directly from the ad.

The key differences from standard Google search ads:

Because you pay for leads rather than clicks, Local Services Ads can be a lower-risk way to buy demand, as long as you handle leads well.

If you remember the green "Google Guaranteed" checkmark, that badge no longer exists.

Effective October 20, 2025, Google replaced its Local Services Ads badges, including Google Guaranteed, Google Screened and License Verified by Google, with a single Google Verified badge. Google also discontinued the money-back guarantee that was tied to the Google Guaranteed badge.

What this means for contractors:

• If you were already verified, your badge should have updated automatically.
• Update any references to "Google Guaranteed" on your website, trucks, ads and email signatures. Advertising a guarantee that no longer exists can confuse or mislead customers.
• The badge still signals that your business passed Google's verification checks.

In 2026, Google began moving Local Services Ads into the main Google Ads platform as a specialized Performance Max campaign type with pay-per-lead goals.

According to Google's help documentation, the rollout is phased:

• August 2026: the first phase began for select U.S. home and storefront service advertisers, including plumbing, HVAC, electrical, roofing and several other categories.
• Late 2026: expansion to broader groups, including service-area businesses without storefronts.
• 2027: non-U.S. accounts and remaining categories.

What Stays the Same

• Pay-per-lead pricing. You still pay only for valid leads such as calls and messages.
• Ad placements. Ads still appear on Google Search and Google Maps in the same positions.
• No keywords. Targeting is still based on your service categories and areas.

What Changes

• Management moves to Google Ads. Budgets, targeting and lead replies are handled inside Google Ads instead of the separate Local Services Ads dashboard.
• Daily budgets. Weekly budgets convert to daily averages. Google says monthly spend won't exceed the daily average budget multiplied by 30.4.
• Bidding. Manual bidding, such as setting a maximum cost per lead, is being retired, along with category-level target cost per lead. If you want separate targets for different services, Google suggests separate campaigns.
• Google Business Profile sync. Your business name, address and hours sync from your Business Profile to Google Ads. Major changes to name or address can trigger a verification review that may pause your campaign for a day or two.
• BBB callouts removed. Google recommends adding other callouts, such as specialties and payment methods, instead.
• Historical reports don't carry over. Past performance reports stay behind, so download or screenshot them before migrating. Lead history, including messages and call recordings, does transfer.

Local Services Ads reward businesses that are responsive and well-reviewed. These steps matter most.

Answer Every Call

Missed calls are wasted opportunities, and you may still be charged for them. If you can't answer during work hours, use an answering service or route calls to someone who can. Research published in Harvard Business Review found that companies contacting leads within an hour were nearly seven times as likely to qualify them as those that waited longer.

Respond to Messages Quickly

Message leads go cold fast. Set up notifications so someone replies within minutes.

Build Reviews

Reviews appear prominently in Local Services Ads. A steady review process improves both your visibility and your chance of being chosen.

Set Accurate Service Areas and Job Types

Only select the areas and job types you actually want. If you don't do small repairs, don't list them. This is the most direct way to improve lead quality.

Use Lead Feedback

In Google Ads, the Leads page includes a lead feedback form. Use it to flag invalid leads, such as wrong numbers, spam or requests for services you don't offer.

Set Your Schedule

Lead costs vary by trade, location and competition. One February 2026 benchmark from SearchLight Digital, as reported by Enrich Labs, put the blended home-services cost per lead at about $53 across hundreds of contractors. Treat that as a rough reference, not a quote for your market.

The more useful number is cost per signed job. If one in four Local Services Ads leads turns into a job, a $60 lead means $240 in marketing per job. Compare that against your other channels.

Many contractors run both:

• Local Services Ads capture high-intent local searches and charge only for leads.
• Search ads give you control over keywords, ad copy and landing pages, and let you target services that Local Services Ads may not cover.

Running both gives you more space on the results page. Track each separately so you know which produces better jobs.

Is Google Guaranteed still available?

No. Google replaced it with the Google Verified badge in October 2025 and discontinued the money-back guarantee.

Do I need a website for Local Services Ads?

The ad links to your Google profile rather than your website, but a strong website still helps customers who research you before calling.

Do I still need to re-verify licenses and insurance?

Google's migration documentation says verified status carries over and that insurance and license re-verification is no longer required after migration, though Google may still request additional business checks.