SEO vs. Local Services Ads: Which Drives More Leads for Local Service Providers?

New leads are the lifeblood of any local service business.

But when it comes to attracting new customers through search engines, you may find yourself torn between two strategies: search engine optimization (SEO) and Local Services Ads (LSAs).

In this post, we’ll address the relative benefits of both channels for lead generation. We’ll also discuss when it makes sense to go with one option over the other.

Let’s start with the basics of both channels.

SEO for Local Businesses

SEO is the practice of optimizing your site to appear prominently in Google’s organic (unpaid) search results.

For service providers operating within a specific geographic area, the focus is typically on local SEO. The goal here is to maximize your business’s organic visibility for local search queries related to the services you provide.

For example, if you’re a plumber in Boulder, Colorado, optimizing for local SEO could help your business appear when users search for phrases like “plumber near me” or “emergency plumbing Boulder.”  

Common tactics for increasing local search visibility include optimizing your Google Business Profile, gathering positive customer reviews, and targeting location-specific keywords on your website.

Here’s an example of the Google Business Profile listing for Precision Plumbing in Boulder.

Further reading: What Is Local SEO and Why Is It Important? 

What Are Local Services Ads?

Local Service Ads (LSAs) are a specialized ad format designed to connect local service providers (like plumbers, electricians, or lawyers) with nearby customers.

They appear at the top of local search results (even above “regular” search ads) and contain contact buttons for potential customers to call or message you.

Like this:

Unlike traditional search ads that charge per click, Google’s LSAs are charged on a pay-per-lead (PPL) basis. This means you only pay if a potential customer actually contacts your business by clicking the ad.  

SEO vs. Local Services Ads: Key Differences

Now let’s compare some of the main benefits and drawbacks of both SEO and Local Service Ads (LSAs) to give you a better sense of how each channel works. 

Time to Results

SEO

SEO is a long-term investment. 

It can take several months of consistent effort in optimizing your site, creating quality content, and building authority before you see noticeable improvements in your organic visibility.

That said, once your site ranks well, SEO can provide a consistent stream of high-quality leads for months or even years.

So if you’re willing to commit time and resources upfront and wait a few months to see the impact, SEO is a great way to build a strong, long-lasting online presence.

LSAs

LSAs are designed to deliver immediate results.

Once Google approves your campaign and your ads go live, you can expect to receive new leads within days or hours.

Although LSAs can drive quick results and require minimal intervention once you’ve set them up, the flow of leads stops the second you pause your ads.

Visibility

SEO

Organic listings appear below paid ads, including LSAs and traditional PPC ads. This means that even if you achieve strong rankings through SEO, your visibility will often be secondary to paid placements.

Moreover, there’s no guarantee you’ll achieve or maintain top rankings among organic results—especially if competitors are also investing heavily in their SEO efforts.

But once you do secure prominent organic rankings, SEO can give you consistent, long-lasting search visibility. 

SEO also allows your site to appear for a much broader range of search terms. In other words, you can capture users at different stages of the buying journey—not just those ready to book immediately.

For example, a landscaping company could rank for high-intent keywords like “landscaping services near me.” But it could also rank for more informational queries like “best plants for shady gardens” or “how to maintain a healthy lawn.” This allows the company to build trust and awareness with potential customers earlier in their decision-making process.

LSAs

LSAs appear at the very top of the search results, giving you maximum visibility.

This prime placement means your business is one of the first options potential customers see when they enter a relevant, location-based query.

You can further enhance your LSAs visibility by earning badges like Google Guaranteed, Google Screened, or License Verified by Google. 

Like this:

These badges signal that Google has vetted your business, which builds trust with users and increases the likelihood of leads getting in touch. 

However, LSAs only give you visibility for queries that directly match the specific services you’ve chosen in your ad setup. This means your reach is limited to high-intent searches like “emergency plumber near me” or “electrician in memphis.” 

Plus, your visibility with LSAs is directly tied to your ad budget. Once you stop spending, your premium visibility disappears completely. 

Cost Structure

SEO

Appearing in Google’s organic search results doesn’t cost anything—at least not directly. 

That said, there are ongoing costs associated with optimizing your website for SEO best practices and creating new content. 

These activities require a continuous investment in time and resources, especially when you’re getting started. And many businesses choose to work with SEO agencies or consultants, which also factors into the cost.

The upside is that you essentially attract leads for free once your SEO program is up-and-running. Over a longer time horizon, this makes SEO one of the most cost-effective marketing strategies out there.

LSAs

LSAs operate on a lead-based pricing model, so you only pay when a potential customer contacts you through the ad.

This provides more predictable results because you’re paying for actual customer inquiries—rather than clicks that may or may not convert. 

With traditional PPC ads, you can drain your ad budget on users who click but never reach out. But with LSAs, you ensure your spending is directly tied to generating real leads.

The downside is that the cost per lead (CPL) can vary widely depending on your industry, location, and the level of competition. 

And again, the moment you stop spending, your leads stop coming in.

The Verdict: Are SEO or Local Service Ads Better for Leads?

Whether it’s best to go for SEO or LSAs depends largely on your business goals, timeline, and budget.

SEO is a smart choice if you’re looking to build a strong, sustainable online presence that attracts a consistent flow of leads without additional advertising costs. 

It also allows you to capture potential customers at various stages of their buying journey—whether they’re conducting initial research or looking to make an immediate booking.

But SEO requires patience. You can expect to wait several months before your organic visibility is strong enough to generate a significant number of leads.  

In contrast, LSAs are perfect if you need instant results. Once your ads are set up and approved, you can start receiving inquiries almost immediately.

This makes LSAs especially useful if you’re looking to quickly fill your pipeline or generate leads during a slow season.

Ultimately, a combined strategy often works best. If you have the resources, you could use LSAs to drive quick, short-term results while investing in SEO for longer-term growth.