What Local Service Ads really cost

Before anything else, a warning about the genre. Search this topic and you will meet a wall of confident statistics, nearly all of them published by companies selling answering services and AI receptionists. We sell one too. So this page cites Google’s own documentation for every claim about billing and ranking, and names the dataset behind every number that is not Google’s. Where we could not verify something, we left it out rather than round it up.

An earlier version of this page had the billing rule wrong, in the same way almost everyone has it wrong. That is fixed below, and worth reading even if you have run Local Service Ads for years.

Chasing the missed call is what creates the charge

Here is the consequence nobody writes about. A homeowner rings your Local Service Ads number at four in the afternoon, gets your voicemail, hangs up without leaving a message, and never hears from you again. By Google’s own conditions that is not a charged lead.

Now run it again. Same call, same hang-up, except this time you spot the missed number at seven the next morning and ring back. You reach them, or you leave them a voicemail. You have just satisfied the third condition, and the lead is billable.

This is emphatically not an argument for ignoring missed calls. A booked HVAC job is worth many multiples of a lead fee, and the answer rate you build by chasing them feeds your ranking. But it does change the honest accounting. A missed call does not cost you a lead fee for nothing. It costs you one of two things:

• They left a message, you paid full price for the lead, and now you are calling a voicemail back and hoping
• They left nothing, you paid nothing, and the job is simply gone without ever appearing in your numbers

The second is the one that should worry you, because it is invisible. It does not show up as a wasted charge on an invoice you can go and argue with. It shows up as a quiet quarter.

Answering is a ranking input, and you cannot bid around it

Google is unusually direct about this one. Its own words: if you regularly fail to answer calls or respond to messages, your ad ranking may be affected.

Responsiveness sits in the Local Service Ads auction alongside your review score, your proximity, and your profile quality. That makes Local Service Ads one of the very few ad products where how you run your business feeds straight back into how much distribution you get. On a normal click-bought channel, a bad week on the phones costs you that week. Here it compounds, because the ranking drop makes the next lead more expensive to win, which tightens the budget, which shrinks the volume.

Source: Google, Getting started with Local Services Ads and About ad rankings.

What Google credits now, and what it quietly stopped crediting

If you last read the credit rules a while ago, check them again. Google now runs its own models over every lead, decides which ones look invalid or low quality, and issues those credits automatically instead of waiting for you to file. Charged leads also get reassessed after the fact, so a credit can land later.

The part that catches people out is what came off the list. Google no longer supports credits for job type not serviced or geo not serviced, which were the two reasons most contractors leaned on. Credits are also unavailable in the health care and tax verticals, and for advertisers in EMEA.

Not answering has never been grounds for a credit, and there is no sign that will change.

Source: Google, About Automated Local Services Ads lead credits.

Most of the numbers you will see quoted are invented

You will have run into these. Sixty-two percent of calls to small businesses go unanswered. Missed calls cost the average small business $126,000 a year. Caller patience has collapsed from eight seconds to 2.3 seconds.

We went looking for where they came from. Nearly every trail ends at a company selling answering services or AI receptionists, citing another company selling answering services or AI receptionists. Nobody at the end of the chain is holding a dataset. On the narrow question of how many callers leave a voicemail, the same week produced published claims of 20 percent, 14 percent, 10 percent and under 3 percent, each stated as fact. The 2.3 second figure describes a measurement that, as far as we can tell, nobody has ever taken.

The reason to care is not pedantry. It is that you can check this stuff in your own Local Service Ads dashboard, and a vendor who quotes you a number you know to be wrong has told you something useful about the rest of their pitch.

The ones that do have a dataset behind them

• About 27 percent of calls to home-services businesses go unanswered. This is Invoca’s own call-tracking data, not a survey.
• Service Direct’s tracked-call reporting lands in the same territory, roughly a quarter to a third unanswered, from a completely separate set of phone lines.
• Contractors asked to estimate their own answer rate said 97 percent. Measured, it was 66 percent.
• 85 percent of homeowners contact three or fewer contractors, and around 60 percent decide inside 72 hours.
• Roughly one homeowner in six leaves a voicemail when a contractor does not pick up. Not nobody, but not a safety net either.

Sources: Invoca, platform data. Service Direct, survey of 559 US homeowners, April 2022, and its Call Performance Report.

Two of those belong together. Contractors believe they answer nearly every call, and they answer about two thirds. Meanwhile the homeowner is working a list of three names and deciding within three days. Nobody in that scenario is being careless. The gap is just genuinely hard to see from the inside, because the calls you never knew about are the ones that never rang twice.