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Google is changing Local Services Ads again, and this one actually matters.
In this episode of Owned and Operated, John Wilson sits down with Sam Preston of Service Scalers to break down Google's biggest LSA update yet. With Local Services Ads moving into Google Ads and Performance Max, contractors could see major changes to how budgets are spent, campaigns are managed, and leads are generated.
John and Sam walk through what's changing, what could go wrong, and the simple checklist every contractor should work through before the rollout. If Google is an important lead source for your business, this is an episode you'll want to hear before the switch happens.
In This Episode:
- Why Google is moving LSAs into Google Ads
- What Performance Max means for contractors
- The biggest risks during the migration
- How to think about budgets and campaign structure
- What data you need to save before it's gone
- Why your Google Business Profile matters more than ever
- What to watch for if your lead volume changes overnight
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John Wilson → https://www.linkedin.com/in/johnbwilson1/
Sam Preston → https://www.linkedin.com/in/sampreston/
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CHAPTERS
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00:00 LSA Shakeup Preview
01:02 Migration to Google Ads PMax
09:20 What Stays Same vs Changes
14:27 Budget Risks and Action Checklist
26:31 Stats, Prep, and Final Thoughts
More Ways To Connect with O&O
John Wilson, CEO of Wilson Companies
Jack Carr, CEO of Rapid HVAC
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Speaker: 00:00
Google changing their LSAs again, but like kind of in like a big way. They're like basically turning it into Chat GPT, and then that whole system's gone. Like the results will be like answer driven and not search driven anymore.
Speaker 1: 00:11
US home service verticals are all coming in in August.
Speaker: 00:15
Like Google only spends like five grand no matter what I do. If it runs like Google ads, like I see that as like a big upcoming like ad budgets get really quick.
Speaker 1: 00:24
If you start seeing it drop in leads, first place you should go look is your LSA.
Speaker: 00:28
What should I be looking up for? Yeah, so one is welcome back to Owned and Operated, a top 150 business podcast. I'm your host, John Wilson, and on the show we talk about home service companies and how to build them. A lot of it's uh me talking about my own home service company here in Ohio, Indiana, and Tennessee. Uh, but we also bring our friends on and we talk about things they're trying in their business. We talk about acquisitions and a ton more. So make sure you sub. Today I'm joined by my good friend Sam Preston, the CEO of Service Scalers. And we're talking about kind of like a weird thing that seems to be happening right now, which is Google changing their LSAs again, but like kind of in like a big way. They've definitely been sending updates, but like they're just yeeting LSA straight into PPC, is what it sounds like. So I I want to, I'm trying to figure out like how should I be thinking about this as a contractor? Welcome to the show.
Speaker 1: 01:31
Yes, you should be thinking about this. This is a big change, specifically if you're already running LSA. Um, but also if you've not run LSA, I think this is there's gonna be a ton of people that are not paying attention, they're not gonna see this. Uh, each account's gonna get 14 days. Uh, they're gonna get 14-day emails notifying them, a seven-day reminder, and then that old system's gone. It's all gonna be moved over to PMAX uh inside of Google Ads. And uh, so if you haven't been running LSA, this might be a good opportunity to jump in and play around with it. Um, because I think there's gonna be a lot of people that are not paying attention and suddenly their LSA is just not working as well.
Speaker: 02:12
So can you like ex yeah, explain to me what is happening? Yeah, like is it a so effectively is it going to be PP, is LSA just like PPC now, or is it an LSA function inside the Google Ads platform? Because I feel like that's those are two really big distinctions.
Speaker 1: 02:30
It's a big one. Um, and for now, they are just moving the the platform, not the product. Um, so there will be some different changes, and we can we'll we will go through that. Uh, but effectively, right now is you're able to log into uh your LSA account, and that's where you do uh your LSA activities to drive leads through that. Um, this is a platform that hasn't changed all that much. They've done some tests, right? Like they uh allowed you to uh rate your leads and things like that. They're always testing different things. Um, but now they are pooling that system inside of Google Ads uh where you can run uh uh now P Max campaigns, yeah. Um LSA style.
Speaker: 03:17
So you can run PSA or PMAX LSAs. Yeah. And PMAX, I think, is what stands for performance max, right? So it basically like automates your budget to maximize either number of leads or cost per lead or whatever output you're aiming for.
Speaker 1: 03:33
Yeah, I mean, the what PMAX was really good at is putting your ad everywhere. So whether you're running a search campaign, a YouTube campaign, uh like if you go to uh the New York Times and you see like a little ad that's in the corner of that, that's usually put there by something like a performance max uh campaign. Uh, it gives you very low cost per clicks to um uh and traffic to your site. The leads generally weren't as strong as just a straight up search campaign. Um and then last year we really were trying to move away from that. So we tested it last year and PMAX really wasn't working very well. So we moved away from that. We were really primarily searched throughout all of our uh campaigns. This year we're testing it out more and starting to see more success. Um what's funny is like since since PMAX can put that ad anywhere, the the primary channel that was working inside of PMAX was still search, and we're just starting to see that. So that's that's a big change that we're already seeing is performance max is starting to work better. And now it makes a lot more sense that uh because I think it's Google has been like uh preferring that channel or that that type of campaign. So now they're moving LSA inside of it. Um, it's still going to be a pay-per-lead model. Um, so won't be pay-per-click for now. I'd be surprised if that stays forever. Um, I think Google makes way too much money on their pay-per-click model. Um, and I think this is part of why they're doing it. I think the other thing is this merges all the paid um uh products that they have in one account, and Google Ads has an API that you can hook into. Um, whereas uh LSA did not have that. It was from your PMAX campaign.
Speaker: 05:25
Hiring great leaders shouldn't be a guessing game. At the Military Veteran TMV, they connect home service businesses with proven leaders, military veterans who know how to execute, adapt, and inspire. Their clients scale faster, hire smarter, and build stronger teams. One HVAC company even grew from 50 million to $3 billion in just five years with TMV's help. They move fast, handle the heavy lifting, and deliver exceptional talent you won't find anywhere else. If you're ready to hire leaders who actually drive results, get a free 45-minute TMV executive coaching session with a successful home service entrepreneur when you mention owned and operated. Click the link below to get started. Yeah, I wonder if this is like um, it reminds me a little bit of they're they're doing uh they're combining Google search or sorry, they're making Google search like I don't even know how to describe, they're like basically turning it into Chat GPT. Like the results will be like answer driven and not search driven anymore. Um, and I was wondering how they were gonna do LSA, but like this makes more sense because they are driving their like ads into it, and like LSA is just a part of that, which I feel like that makes a lot more sense. But I think that change is going live this fall. Like they're basically sunsetting like the Google search that we've known for 20 years, and it's just becoming like an answer.
Speaker 1: 06:53
No, no, not this fall, August. Uh oh, literally US home service verticals, plumbing, HVAC, electrical, appliance, repair, house cleaning, lawn clear care, roofing, pest control, and moving LSAs are all coming in in August. And then later in 2026, uh other types of uh services like they're pushing the wild. And I I think it is uh to to what you've said is I think they're moving more to the AI mode. Um, and so that this is like one of those first steps because they are gonna want to run ads through there.
Speaker: 07:30
Yeah, totally. No, that makes that makes total sense. Yeah, that's that's really wild. I I just want to understand, like, I would love to hear I feel like LSA changed the game for home service. Um it made getting leads easier for everyone for a while. And like people still do it. It's like a high, it's a it's it's like one of the best lead sources out there. Um and I I think I would just be fascinated to know like what percentage of how much I'm just gonna I'm gonna Google it. Like, but how much how much do they make from LSA versus PPC? That's a great while you're searching for because it feels like they keep treating it like sort of like a stepchild, but it has to be like very valuable to them. No one knows. Okay.
Speaker 1: 08:24
My hunch is that they make more at at PPC, and that's one of the reasons why they're making this move. Um but there is gonna be a lot that stays the same. So right now, yeah, walk me through it.
Speaker: 08:40
Now I'm Googling like Google's revenue mix.
Speaker 1: 08:43
Kidding. Uh so top of search and maps placements, same position. So, like, okay, what they're saying is when you search for plumber near me, that first section is still gonna be LSA. Um, your Google verified and Google guaranteed badge should carry over. Um, it's still going to be keywordless targeting. Um it's still gonna be a pay-per-lead model, not a pay-per-click. Uh your lead history should transfer over to the lead manager. Um, and the disputes should still work. Um it's just it should be the same uh mechanic, new location. Um, I am interested to know because they didn't mention this, but like how will listening to those phone calls work? Will it still be the same system? Um and so that'll be that'll be super interesting.
Speaker: 09:38
Yeah, no, that will be really interesting. There's a couple changes here too. I've got some notes. Yeah. Yeah. There's like what are the big what are the big changes? What what should I be looking out for?
Speaker 1: 09:50
Yeah, so one is setting your budget. So it's gonna go from weekly to daily.
Speaker: 09:56
Um and that's I feel that that's how meta and Google Ads worked, anyways, right?
Speaker 1: 10:01
Yeah. Um, and so it's it's it's important to know that because one of the things that'll happen, and we have this issue with LSA because you just set it for weekly, um, and you would just use all your budget early on in the week. Uh, you might have this same issue uh with daily budget, is where you'll get a daily allow allotment, let's say it's like $50, and you spend all 50 of those dollars at 8 a.m. Well, that means you're not getting any of the leads that are coming in between four and seven p.m., which are generally your best leads because people are getting home, finding issues, and reaching out. Um so like that's gonna be a thing. You're gonna want to make sure that's high enough to get through the day. Um the type of bidding is gonna change. So the old way used to be like a manual uh max cost per lead. Um, and now it's gonna be an automated target. Um they're calling it CPA, but it's effectively the same thing. Uh cost per lead that's gonna come through.
Speaker: 11:01
Um honestly, I kind of like this thing. I I think. I mean, because as I think about switching over to daily budgets, and as I think about like using the PPC structure, which I think is what they're saying they're gonna do, like that should work better. I would I would imagine that would work better than the sort of like the weekly thing, always felt a bit odd to me.
Speaker 1: 11:26
This should give you more control. That was always one of my biggest complaints about LSA is like if I did everything right and it wasn't working, there was nothing else for me to do.
Speaker: 11:34
Um, whereas like this, if it's on the back of the PPC like ad system, this would probably fucking kill. And maybe the way to think about it is like, yeah. Well, I mean, obviously, I don't know. Like, so I don't know. The answer is I don't know. Like, I want to I now I want to deploy it and like I kind of want to try, but I I think I'm I think I'm into it. I yeah, I think I like this.
Speaker 1: 11:56
I I agree.
Speaker: 11:57
So like if I come back in two weeks just like weeping, uh, you'll know that I did not in fact like it. Yeah, totally wrong. I hated it completely, it was the worst thing ever. Um mad of the gods of Google.
Speaker 1: 12:10
Yeah, one way or another. Yeah, yeah, we will. Um so one of the things that's changing is there's going to be uh campaign level CPA, or at least this is what they're they're talking about. So, like uh one of the issues with where uh in the in the old system is that you would set your budget and you would say, here are all the services that we're going after, right? Uh and you would get leads. And sometimes you get a lead uh for uh very expensive for really cheap service, and again, not a lot that you can do. Now everything's gonna be based off campaign, apparently. So you'll be able to put your services that you get a better profit, a better average order value in one campaign with a level CPA uh that you're willing to pay, and then the other ones in a different campaign, again, giving you more control over what actually works. Um yeah. I think one of the differences that I'm you know interested in seeing is that LSA was one of those things where you could just go to YouTube and figure it out. Like if you were a small contractor, this definitely complicates LSA. Yeah. So I remember talking to people through it. Like, here's our exact algorithm, this is what we do, here's our recipe, go do it because you're small enough that you shouldn't hire an agency yet, go just do it.
Speaker: 13:25
Yeah.
Speaker 1: 13:25
Um, and now I am a little nervous about how that will affect people. Uh, if you're more tech savvy, I think they're gonna make it hopefully easy for you to set up. Um PMAX, like the setup is definitely more complicated than just like turn it on, get verified, and see how it goes.
Speaker: 13:44
I mean, I think one of the other like risks that will probably happen easy is if it's on the back of the PMAX structure, which it sounds like we think it is, then most the issue that most people have with their LSAs is their LSAs don't fully spend. So that that issue might go away. We're like, hey, suddenly your LSAs do fully spend. Because what most people do, and I think that's why I'm kind of into it, like if it's on the back of like a better search function, like maybe this works. And then you, you know, it's it's a better situation. Um, but most like I know people that set their weekly budget to a million dollars because they're like, well, never spend it. Like Google only spends like five grand no matter what I do. Uh, but like if it runs like Google ads, like it might spend it. And I I see that as like a big upcoming like ad budgets get fucked really quick. You're trying to break through the five million dollar mark. This is the workshop that I wish I had when I was growing Wilson. From September 15th through the 17th, Jack and I are hosting our one of our famous Breaking Five workshops at our headquarters in Akron, Ohio. You'll see our operation firsthand, you'll sit in our live sales huddles, you'll tour the shop, and we'll break down the exact flywheel that we've used to scale. Every workshop that we've done has sold out. So if you're serious about building your business, grab your spot now at the link below before it's too late.
Speaker 1: 15:14
Well, it's gonna be good and bad, right? So for the people that have money and then want to spend, I think you're gonna be it's gonna be much easier for you to go like price out the um the competition. I'm ready to price out some people. If you're willing to spend I'm ready, if someone can only spend $50 on a cost per lead, this is something you've been preaching for years now. Yeah. If someone can only pay $50 for a cost per lead, but you're willing to spend $150, like you'll burn through your budget and you'll get those leads where somebody else might not. Yeah. Um so I am curious to see how that that performs. There are some urgent tasks, right? Again, like it's uh we're recording this on July 23rd. This is not gonna go out for another week. So like you're pretty close to August, guys. Uh so first thing you need to go do is uh your performance reports do not transfer. Your lead history should, but your performance reports won't. So go into this dashboard and make sure that you're exporting those. Uh make sure you export your monthly lead volume by category, your cost per lead by uh category, your total spin, your dispute credit history, your booking ratings, all that's gonna go away. Yeah. So uh the Google's own, like the only thing they've said is uh that uh no action is needed for you except for backing up reports.
Speaker: 16:37
So yeah. Um okay, so if you need uh Okay, like previous, which you know, we'll probably need that. Yeah.
Speaker 1: 16:48
So we're doing that for all our clients right now where we're pulling out all that data uh and all that performance because we want to be ahead of that.
Speaker: 16:56
Yeah, yeah, yeah, yeah, yeah. I do wonder how um I do wonder how like I feel like this is the second time they've like shuffled the LSA around. Because I feel like a year ago they were like, hey, LSA is now GBP. Um and now they're like pulling it from the GBP. It'll be really interesting to see like how that how that interaction works. Because though they became the same thing and now they're divorcing it.
Speaker 1: 17:23
Yeah, I remember we used to have the review strategy of like you want to send that review specifically to your LSA reviews, not your GPP, because those are two different places and they became one, so it didn't matter where you sent it. Um, that will still be super important. So uh one of you know, uh one of your checklist items that you should be doing is auditing your GBP for NAP consistency, name, address, phone number. So name, address, hours, phone, uh, make sure everything is set correctly. Um, because you will still be using GBP as a profile for how you're running your LSA ads. I don't know exactly how that'll work. That's just what we're seeing uh inside of Google. So if I give you a checklist real quick of things that you should be doing right now, is one, go export all your historical reports now. Two, audit your GBP, three, decide on the campaign structure before the I'm writing these down. Um I'm over here, like good, let's go. Good, good, good. Uh Servicecales also wrote a blog on this. So nice. Um I don't know if we could put that in the show notes, maybe. Yeah, yeah. No, we can like toss a link to that.
Speaker: 18:34
That'd be sweet. I mean, I think this is a big deal that everybody needs to be like pretty thoughtful about because I think LSA has as I think about the big challenges I've already I've already said them, but like the big things I'm thinking about are we've always overestimated our weekly budget because LSA never spends it. Now it might. So like that's a big deal. Yeah. Um performance could hypothetically go up or just be unchanged, or I guess go down. But like if it's on top of PMAX, I'm actually kind of excited about that. Um and then really need to audit our GBPs. Uh so like all that to say, like this feels like a big deal. Um, yeah, we'll we'll toss that link in our show notes uh and like in the description below if you're watching on YouTube and you can check it out. That's a good that's good.
Speaker 1: 19:18
A couple other things that you need to do is you need to rewrite your call-outs. So uh your BBB call out will not transfer. It was on LSA, it will not transfer over to um uh uh the Google Peam X. Um and then prep like six other call-outs. So things like things like um your license and insured, 24-7 emergency, uh, free estimate, same day, uh financing, family veteran owned, things like that as a call-out. Make sure you get those down. Um, and then I think you need to be in the mindset of a weekly or two-week window of monitoring uh after the switch. So just make sure that you're in it. Uh, if you're working with an agency, make sure they're in it uh and giving you a report on what's going on. Yeah. Uh and just like know that this is happening. If you start seeing it drop in leads suddenly, first place you should go look is your LSA, you know. Um so uh this is a big deal. Um, this is a massive migration, so you just you don't know how these are gonna go. It could be nice and they can fumble the back.
Speaker: 20:29
So yeah, so maybe the big thing to be thinking about over the next couple weeks is like, do you have a backup lead source in case something goes shitty? Yeah, yeah.
Speaker 1: 20:40
I even had uh two different sales calls this last week where I specifically would not sell them LSA. I was like, I'm not gonna like start an account for you if in two weeks it's gonna be completely different. Uh let's stop in two weeks. Um, yeah. And so we're like paused on selling that service until we get past the next couple weeks and then we'll uh be back.
Speaker: 21:02
Well, I think that makes sense. I think we're definitely like in an observation period of like what's gonna happen, how's it work? Okay, yeah. This was good. I've got a lot to like go talk to my marketing team about. This is good. This is good.
Speaker 1: 21:14
Let's go.
Speaker: 21:15
Okay, so like biggest takeaways. Uh I feel like we talked about the biggest risks, seems like an opportunity. Um, and like if you migrated tomorrow, the big things are gonna be like get your records, audio your profile, um, update your call-outs, which yeah, and that's like you know, family landed operated, insured, licensed. Um verify like where the leads go. So like check the phone numbers because LSAs are like attached to specific phone numbers for us. Yeah, dude, this is gonna be kind of messy. This is gonna be messy. I bet this will be rough. And it's just gonna happen with no warning, right? Like it'll Like one day we'll just wake up and we migrated.
Speaker 1: 22:03
Yeah. Yeah. And they they should give you a 14-day window uh with a 17 seven day warning. Um but you know uh you just need to be prepared. If you're if you're running other ad platforms, do it. The other thing, if you uh if you're running a PPC campaign uh account right now, I would highly recommend starting PMAX. You know, if you don't already have one in there, um I think it'll matter. You know, like we want to start um getting conversion data inside those conversion events. Um I think it's helpful. We're running them anyways and feeling pretty strong. Like those are those are being helpful. Um so highly recommend if you have the budget, start running those anyways. Um, it might help you in that transfer. Um I I don't think it'll be I think it will be one of those things that is messy. I think things will happen. I don't think it'll all be bad. I think some people will come after this and go, like, I had a great August uh because the switch happened and I I I covered a lot more ground than I usually get from LSI.
Speaker: 23:10
Yeah, no, that's really interesting. Awesome. Well, man, this was good. This feels like we covered some good stuff. I feel like I've got some notes here. Um, I loved it. Here's a stat about Yelp that I bet you didn't know. When millions of people ask AI like ChatGPT, Perplexity, or any of the others what the best home service provider is, Yelp recommendations show up three times more than Angie, Thumbtack, Home Advisor, Better Business Bureau, and Nextdoor combined. And here's why that matters to you 91 to 97% of those searches do not include the business name. The homeowner hasn't picked anybody yet, and they're deciding right now, and Yelp is where they're getting their answers. These aren't low-intent browsers. Over half of Yelp's 76 million monthly audience earns six figures and owns their home. Jose Varga started a five-star HKC on his own in Dallas, and he turned on Yelp ads, and they hit 30% year-over-year growth with $650 revenue per call, and he grew his monthly leads by a 444%. If you want to own the moment when homeowners are making their choice, you should be checking out Yelp. Start earning your share on Yelp's 350,000 daily home service leads by going to business.yelp slash owned and operated.
Speaker 1: 24:28
I was gonna say, I do actually have some data points that might give us insight into one of the reasons why they're moving over here. Uh, we don't know exactly uh how much revenue they're making, but the average LSA uh cost per lead is $53. The average PPC in comparison is $149 for non-branded leads. Um so it's almost three times more expensive to get a PPC lead than an LSA.
Speaker: 25:00
Yeah.
Speaker 1: 25:01
Um that's interesting. Now again, the LSA is blended, so it will have branded and yeah, locksmiths at five bucks.
Speaker: 25:09
And yeah.
Speaker 1: 25:11
Yeah. And so maybe the lead quality is not nearly as good. So there might be some stuff there, but um the average like return on investment was a 7.84 uh for LSA. And we found that from like Search Lite, because they have all the data where they connect um stuff is is great. Um, which I don't actually have that for PPC, which is super interesting. Um so it'll be interesting, man, uh, to see how this change shakes out.
Speaker: 25:42
Yeah. So you basically think they're like tripling revenue like for this segment, anyways. That's fucking cute.
Speaker 1: 25:50
I wish I could just do that. Uh you know, just yeah. Um click a button. It it'd be nice if we had a type of monopoly, you know, just a little own the market. Yeah.
Speaker: 26:02
Yeah, that is that is that is crazy. That's crazy. Awesome. Um and any other quick hits on this?
Speaker 1: 26:12
Nope. Just be prepared. It's coming for you. Um and you'll be okay. We'll make it through.
Speaker: 26:19
We'll make it through. Thanks for coming on today. I appreciate it.
Speaker 1: 26:22
Thing for you, John.
Speaker: 26:24
If you like what you heard, make sure you like and sub.
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