What Just Changed with Google Local Services Ads?
Google has significantly expanded the categories available for Local Services Ads (LSAs), giving businesses in restaurants, automotive, and beauty more precise ways to advertise. This update comes as Google prepares to migrate LSA campaign management into Google Ads by 2027. The first phase begins in August 2026 for select U.S. home and storefront service advertisers, with broader rollout later this year and non-U.S. accounts in 2027.
Specifically, categories like 'Restaurant' now break down into American, Chinese, Italian, pizza, sushi, steak houses, vegan, and more. Automotive categories now include Auto Air Conditioning Service, Auto Glass Repair, Brake Shop, Car Battery Store, Car Inspection, Oil Change, Tire Shop, and Transmission Shop. Google confirmed the increased specificity is intentional, allowing businesses to match their exact services and attract higher-intent customers.
Why This Matters for Your Business
If you run a local service business, this expansion means you can now target customers searching for your specific service, not just a broad category. For example, a transmission shop can now appear for 'transmission repair' searches, rather than competing under 'auto repair.' This precision can improve your ad relevance and potentially lower your cost per lead.
However, there's a catch: Google has removed the Verified badge for auto, beauty, and dining categories. Previously, only dining was excluded. This badge signals trust to consumers, and its absence could reduce click-through rates and lead quality for businesses in these verticals. You'll need to rely on other trust signals, like reviews and business information, to build credibility.
The Migration to Google Ads: What to Expect
Google is moving LSA management into Google Ads over the next two years. The good news: your existing campaigns will automatically migrate, so you won't need to rebuild them. The pay-per-lead model and keywordless campaigns remain unchanged. But you'll need to familiarize yourself with Google Ads' interface and features, which may require additional learning or hiring help.
This migration also opens opportunities to integrate LSAs with your broader performance marketing efforts. You'll be able to manage all your campaigns in one place, potentially improving efficiency and ROI.
New Pre-Badge Ads: Get Leads Faster
Another update: eligible businesses that pass preliminary checks can now start receiving leads before completing full Google Verified requirements. These 'Pre-badge' ads appear below fully verified providers. This is a great way to test LSA effectiveness and generate early leads, but you'll need to complete verification to move up in rankings.
Strategic Implications for Local Advertisers
This expansion signals Google's commitment to dominating local services advertising. By making categories more granular, Google improves ad relevance, which benefits both advertisers and users. But the Verified badge removal for auto, beauty, and dining could be a double-edged sword: it may reduce trust, but it also levels the playing field—smaller businesses without the badge can still compete, though they may need to invest more in reviews and other trust signals.
For businesses in newly added categories, this is a golden opportunity to capture high-intent local customers. For those in affected verticals, it's time to reassess your trust-building strategies.
Bottom Line: Impact for Executives
Executives should view this as a strategic shift, not just a minor update. The migration to Google Ads means you'll need to plan for a more integrated advertising approach. The category expansion offers immediate targeting benefits, but the Verified badge changes require a proactive response. Start by reviewing your current LSA setup, identify which new categories apply to your business, and prepare your team for the Google Ads transition.
In the short term, test new categories to see if they improve lead quality. In the long term, invest in building a strong Google Ads skill set within your team or consider partnering with an expert. The businesses that adapt early will gain a competitive edge.
FAQ
Your existing LSA campaigns will automatically migrate to Google Ads, so you won't need to rebuild them. The pay-per-lead model and keywordless setup remain the same, but you'll manage everything within Google Ads.
Without the badge, you may see lower click-through rates and lead quality, as consumers often trust verified providers. Focus on building strong reviews, detailed business information, and other trust signals to compensate.
