Why Google Home Service Ads Will Transform SEM for Contractors


Currently available in select markets through AdWords Express, tests of Home Service Ads have been accelerating rapidly over the last few months, and Google is already making plans for a much larger global rollout.

This program is expected to completely reshape online advertising and search marketing for home service contractors. But that won’t necessarily be to contractors’ benefit. Here’s why.

What Are Google Home Service Ads?

Google’s Home Service Ads program is a paid advertising and lead generation program for providers of home services. Services covered by the program include house cleaning, plumbing, home repairs, locksmith services, and others.

Paid advertising within Google search might sound similar to the standard Google AdWords program. While it has elements of traditional PPC, this program is very much a new form of search engine marketing for contractors.

Here are the basics of how the Home Service Ads program works:

  • To qualify for the program, contractors must pass background, license, insurance, and reputation checks. These are paid for by Google.
  • When a Google user searches for a home service keyword, three sponsored ads appear prominently within the search results. Google is still testing different locations and ad formats, but these ads are typically the first results that users see.
  • Each ad includes the service providers’ name, their customer review rating, a “Google guaranteed” badge, the business location, a phone number, and information on whether the business is open or when it will open next.
  • Users who click on any of the ads are directed to a new page and invited to submit a request for a quote to one, two, or all three of the service providers. Contractors are charged a lead generation fee of $25 for each quote request — regardless of whether or not it leads to a job.
  • The phone number within each ad is generated by Google. When a user calls the number, Google tracks the call and forwards the call to the business. This way, Google earns a lead commission from all calls generated through Home Services Ads.
  • Google guarantees the customer’s satisfaction on work quality, covering claims up to the job invoice amount. There is a lifetime cap on claims of $2,000 for each user.

Impact on SEM for Home Contractors

Google watchdogs expect this program will quickly expand in the coming months. Home Service Ads testing was originally restricted to the San Francisco Bay Area, but has since expanded to Atlanta, Los Angeles, Philadelphia, Phoenix, Sacramento, San Diego, Seattle, and Stockton. Google has already announced plans for a global rollout in 28 countries and 12 languages.

Why the rapid rollout? In May, Home Advisor announced that it had acquired its biggest competitor, Angie’s List. Google appears to be ramping up Home Service Ads to gain a competitive edge before Home Advisor starts to dominate the market.

But some are worried about the impact this new approach to paid search engine marketing might have on contractors. Google’s triple-dipping lead generation strategy means contractors will end up paying for leads that Google also sends to their direct competitors. If Google decides to increase the price of leads (and that’s more of a “when” than an “if”), that could be especially painful for contractors.

The Google guarantee is another concern. Even though many contractors offer stronger guarantees, most consumers don’t know that. This means contractors within the Home Service Ads platform will be treated as though they offer equal workmanship and peace of mind. To add insult to injury, the threat of being de-certified by Google for a bad customer experience means most businesses will likely bear the cost of the guarantee themselves.

Google’s clout also makes it easy for them to swallow up the majority of search-based leads. Home service ads are already dominating the SERPs they appear on, and Google can tweak its algorithm to squeeze traffic away from competitors. Free leads that used to come from organic search, local search, and sites like Home Advisor, Angie’s List, and Yelp will decrease.

Our Digital Director, Jamie Jones had this to say about the change:

“I think this move by Google is a solid attempt at leveling the playing field for home service companies big and small. There are positives and negatives to integrating these Service Ads into your campaign strategy, but the fact of the matter is, Google is reshaping digital marketing as it relates to local search, with the ultimate winner being the home services consumer.

For marketers and home service providers, the altering affects these ads will have on SEO rankings and Organic Search efforts will warrant a shift in mindset for the development of both short-term and long-term Search Marketing strategies. It is important for home service companies and marketers to do their homework and educate themselves on what these home service ads.”

The truth is, Home Service Ads will probably be extremely profitable for contractors in the short-term. But those short-term profits could come with long-term challenges. Those who prepare themselves early on will experience the real benefits of these ads and be able to navigate the best search strategies for their business.

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