A homeowner's water heater lets go at seven on a Tuesday night. She grabs her phone, searches "water heater repair near me", and the first thing on the screen is not the map and not the usual ads. It is a row of local companies with star ratings, open hours and a small badge next to each name. She taps one and calls. That call was a lead, and the company paid for it.

Is it worth being one of those companies? For urgent, call-now work, often yes — provided you have solid reviews and someone who answers the phone. For big, planned projects like renovations, these ads are usually a smaller piece of the mix, and sometimes the honest answer is "not yet". The rest of this playbook helps you work out which one you are.

What these ads actually are

Local Services Ads are a separate type of ad that sits at the very top of Google's results, above the regular ads and the map listings. They show your business name, your star rating, your hours and a badge that tells the searcher Google has checked your business.

Two things set them apart from almost every other ad you can buy:

You pay per lead, not per click. A lead is a phone call or message from a real person. Someone can see your ad all day and you pay nothing; you pay when they reach out.
Google screens you first. Before your ads can run, Google checks things like your licence and insurance, and in some trades runs background checks on the owner or staff. Pass, and your ad carries the Google screening badge. Skip or fail the checks, and you cannot run these ads at all.

Here is the part to hold onto: which trades are eligible, what the badge is called, what the screening involves and what leads cost all vary by country, and Google changes them often. So before you plan around any article — including this one — check Google's current Local Services Ads help pages for Canada for the details as they stand today.

How they differ from regular Google Ads

If you have ever run regular Google Ads, reset what you know:

No picking search terms. With regular ads you choose the searches you want to appear for and write the ads yourself. With Local Services Ads, Google matches your profile to searches on its own. You choose your trade, the job types you want and the areas you serve.
A different way of deciding who shows. Regular ad placement leans heavily on what you bid. Here, Google weighs your reviews (how many and how good), how close you are to the searcher, your hours and how reliably you answer. Money matters, but you cannot simply outspend a competitor with a stronger reputation.
Leads, not visitors. Regular ads send people to your website and charge you for the click whether they call or not. These ads deliver the call or message itself.
You can dispute bad leads. If a lead is spam, from outside your service area or for work you do not do, you can flag it in your account and ask for a credit. Google reviews disputes and may credit the clearly bad ones, though the rules on what qualifies have shifted over time — another reason to read the current help pages.

Plenty of contractors run both kinds at once: the badge ads for people who want to call someone right now, regular ads for everything else. It is not either-or.

Who they tend to suit

Picture an emergency plumbing company. When a basement is flooding, nobody reads three websites before deciding. The homeowner calls the first business that looks trustworthy. Pay-per-lead is built for exactly this moment, which is why trades like plumbing, appliance repair, electrical and heating tend to be the cleanest fit.

Picture a furnace company in the first cold week of autumn. Call volume spikes, everyone searches at once, and being at the very top matters most in that window. For a smaller company, the screening badge does some of the trust-building that would otherwise take years of name recognition.

Now say you run a renovation company doing kitchens and additions. Your customers plan for months. They want to see photos of finished work, read reviews carefully and meet you before they commit. A badge ad can still produce leads, but a fair number will be early browsers looking for a ballpark price on a project that may never happen. If that is you, treat these ads as a modest experiment rather than a pillar — and read how to get more renovation leads without paying per lead first, because the slower channels tend to carry renovation companies further.

And say you are a one-person shop just getting established. The badge helps, but placement leans on reviews. With only a handful, you may pay for leads while sitting below competitors who have hundreds. That is fixable — it just means reviews come first, which brings us to the next section.

What running them well actually takes

Get the paperwork ready. You will need proof of your licence and insurance, and possibly background checks depending on your trade. Verification is not instant, so start before your busy season, not during it.
Build reviews steadily. Your review count and score heavily influence whether you appear at all. Ask every happy customer, every time, while the job is fresh — here is a straightforward way to ask. Those reviews live on your Google Business Profile, the same profile that decides how you look on the map, so the effort pays twice (see how to get more customers from Google Maps).
Answer the phone. You pay for the lead even if you miss the call, and Google notices responsiveness. If you are on a roof all day, route calls to someone who can actually book the job.
Flag the junk, note the wins. Dispute leads that were wrong numbers, out of area or for work you do not do, and keep track of which ones became real jobs. Both habits tell Google what a good lead looks like for you.
Judge on booked jobs, not lead count. Once a month, count your leads and how many turned into actual work. A pile of cheap leads that go nowhere costs more than a few that book. Your own trend over the months is the only measuring stick you need.

When the honest answer is "not yet"

You have very few reviews. Placement and calls both lean on them. Build the asking habit first; it is free.
Nobody answers during the hours you would run ads. You will pay for rings you miss.
Your website would embarrass you. Many homeowners still tap through to your site before calling, especially for pricier work. If the website is the weak link, fix it first — why is my website not getting leads? walks through the usual culprits.
You are already booked solid. Paying for leads you cannot serve just trains people to hear "no" from you. Some companies pause their ads in peak season for exactly this reason.
Cash is tight. Leads cost money now and pay later. The free groundwork — reviews, a complete profile, asking past customers for referrals — comes first.

None of this is permanent. It is a sequencing question. The businesses these ads work best for are the ones that did the boring groundwork before spending a dollar.

What to do first

Open Google's current Local Services Ads help pages for Canada and check whether your trade is eligible right now and what the screening requires.
Search your main service on your phone and look at the businesses in the badge ads. Compare their review counts to yours. That gap is your real to-do list.
Decide who answers the phone during ad hours, and make sure calls actually reach that person.
If you run a planned-project business like renovations, put your first effort into the free channels and test the badge ads later, with a budget you can afford to write off while you learn.

If you would rather not run any of it yourself, hands-on work across Google Ads and Meta ads is part of our growth retainer, alongside search, social and email, so the ads and everything around them pull in the same direction. And if you are not sure whether ads are even your next move, our website and marketing audit reviews what you already have and hands you a prioritised fix list.

Are Google Local Services Ads worth it for contractors?