Google Ads vs Local Service Ads: Which Wins for Small Business?

If you've Googled 'plumber near me' lately you've seen two kinds of paid results: the green-badge 'Local Service Ads' at the very top, and traditional Google Ads below them. They look similar but they're priced, ranked, and managed completely differently. Here's how to pick.

How they differ

• →Google Ads: pay per click, you build the landing page, you target keywords, you can run nationally.
• →Local Service Ads (LSAs): pay per lead (call or message), Google handles the page, you pass background checks, local only.

Cost comparison

Google Ads cost per click for service businesses varies widely by keyword and market. LSAs charge per lead rather than per click. Depending on the trade and the market, LSAs can be less expensive per lead, but Cedar recommends comparing actual results inside your own account.

When LSAs win

• →You're in a Google-verified industry (plumbers, electricians, HVAC, locksmiths, lawyers, real estate).
• →You're licensed and insured (required to run them).
• →You can answer the phone fast - LSAs penalize slow response.
• →You serve a specific local area.

When Google Ads win

• →Your industry isn't eligible for LSAs (most SaaS, consulting, e-commerce, agencies).
• →You want to target specific keywords or product searches.
• →You want to retarget visitors or run YouTube/Display.
• →You need full control over the landing page and offer.

What we recommend

For eligible trades and professional services, run both. Start LSAs first because they are often simpler to set up. Layer Google Ads on top once you've maxed LSA budget or want to capture specific high-intent keywords LSAs don't cover (like 'tankless water heater install'). For businesses that are not eligible for LSAs, Google Ads is the option in this category.

Bottom line

LSAs are often an efficient path to local leads for eligible businesses. Google Ads gives you more control and reaches more verticals. The right answer for most small service businesses is to run both - LSAs as the base, Google Ads to fill the gaps.