Growing your business is much easier with effective advertising. However, when you have a limited budget, it can be difficult to decide where you will get the best ROI for your marketing investment.
Google Ads and Google Local Service Ads (LSA) both offer effective and affordable advertising, but which is the best option? While it always depends on your goals, local small businesses often get the best results by combining both options. In this article, we look at Google Ads vs Google Local Service Ads and explain why we say: why not both?
What is Google Ads?
Google Ads is an advertising platform that can position your business website at the top of Google search results.
When you pay for these PPC ads, your website can appear above organic search results with a small “Ad” symbol next to it. Potential customers searching for a local business like yours can see your company name before others, potentially increasing your visibility.
However, paying for Google Ads doesn’t guarantee that your website will receive top rankings in search results for terms like “plumbing businesses near me” (for example). It only increases the chances that more potential customers will see your site.
Advantages of Google Ads
- Meet user needs: You can customize your ad text to align with user intent and direct visitors to a landing page that highlights that product or service.
- Budget-friendly: You can set your advertising budget based on preferred keywords to promote specific products or services.
- Data: You have access to free tools that offer useful data based on campaign results to improve your ads and increase conversions/leads.
Cons of Google Ads
- Requires skill: There are many technical aspects to learn before you can optimize your ads, keyword strategy, and bids for the best results. This can involve a costly learning curve.
- Bidding System: Since ranking is heavily dependent on bids, if your budget is not competitive, you will need a solid and informed keyword/bid strategy to achieve the desired results.
What is Local Service Ads?
Local Service Ads (sometimes simply called LSAs) is another Google advertising platform. This platform is best geared towards local businesses looking to target specific, small audiences.
When users search for terms related to your business, your site may rank higher than Google Ads in search results.
Local Service Ads allow you to connect with qualified leads who are searching for your specific services. These ads clearly display your Google ratings, service area, and hours to your target audience. Customers can also easily find your reviews and contact information by clicking on them.
Advantages of Local Service Ads
- Top position: In Google’s search hierarchy, local ads appear at the top.
- Pay per lead, not per click: LSAs are not based on the PPC model, but rather on an industry-based pay-per-lead (PPL) model. This can save you money since you only pay for qualified leads.
- Option to dispute leads: If you receive unqualified leads, you can dispute the lead for a refund based on Google’s list of dispute categories.
- Easy to use: It’s a close to “set and forget” approach to ads.
- Google Guarantee: Once you complete the Google verification process, you earn the “Google Guarantee” badge to build trust.
- Reviews: Since reviews help improve your ranking, you can highlight your high ratings and positive reviews.
Cons of Local Service Ads
- Ranking: While you don’t have to compete for keywords, Google bases LSA ranking on Google reviews and location. This means you need positive reviews to boost your ranking, but you can’t get those reviews without ranking.
- Low-Quality Leads: Automating LSAs can attract customers who don’t specifically align with your services.
- Lengthy verification process: Google has an extensive review process that includes licensing and background checks, which may delay your listings.
Differences between Google Ads and Local Services Ads (LSA)
LSA and PPC ads are unique in their approach and execution. Below, we cover the key differences between the two.
1. Bidding strategy and costs
The first differences to consider are how each type of ad is paid for and how much they cost.
Bidding strategy
With PPC ads, you pay based on the number of clicks your ads receive. Google charges you every time someone clicks on your ad, regardless of whether they convert or not.
On the other hand, LSAs work under a pay-per-lead (PPL) model. This means that you only pay when a lead completes a conversion, such as signing up for a service or contacting your company.
Cost
LSAs are more expensive. For example, the average cost per click (CPC) on real estate PPC ads is $2.10, while the average cost per lead (CPL) is $87.36. However, since a lead is further along in the sales funnel with LSAs compared to a regular click on a PPC ad, you’re paying for a lead that’s more conversion-ready.
2. Keyword research
With Google Ads, you must conduct your own keyword research to determine the terms you want to target with your ad. For LSAs, which are primarily location-based, Google does the keyword research for you.
For LSA, you tell Google what type of service you offer and what location you work in, and they research the most effective terms for your ads. This means you have less work, but also less control over what you target.
Google Ads offers you more customization in keyword targeting, and there are specific differences between the keywords used. The keywords you use for PPC differ in cost, traffic, volume, and quantity from those used in LSA.
3. Reach and audience
LSAs are targeted at local buyers who have an immediate need for service. These ads put your business in front of people who need your services in your area. They might search for things like “HVAC company in [city]” or “emergency vet open now.” Both searches are based on immediate need and location, and require an LSA.
Google Ads can reach a much broader audience with different needs. For example, if you own a shoe store, you can advertise your products in different locations and to people at different stages of the buyer’s journey, not just to those looking to buy shoes in your city.
4. Ad placement
LSAs appear at the top of search results. Since they are location-specific, they rely on location-related keywords and appear for users searching for businesses exclusively in their area.
Google Ads, however, has a much more diverse placement. They are not limited to a single spot in the SERPs, so they can appear in multiple positions.
Types of locations for Google Ads:
- Search Ads
- Display Ads
- Shopping ads
- YouTube Ads
5. Google Guaranteed and Google Screened
Unlike PPC ads, LSAs can earn a “Google Guaranteed” or “Google Screened” badge.
The Google Guaranteed verification badge appears as a green tick on LSAs. This means that the listing meets certain criteria determined by Google and has been evaluated for quality. On the other hand, “Google Screened” is another verification that shows that a professional services firm has successfully passed Google’s licensing checks.
Both of these verifications help build credibility for the advertiser and make users feel more confident about the results. Without these verifications, you can still build credibility, but it’s much easier to rely on that extra layer of security from Google.
Google LSA vs. Google Ads: Which is better?
Use Google Ads to generate leads, win more customers, and build Google reviews. Then, use your reviews to rank higher and target your advertising to a local audience with Local Service Ads.
As business owners, it is important to know all the options available when it comes to advertising. There are multiple ways to achieve success with digital ads.
