Business & Marketing Tips

How Much Do Google Ads Cost for Home Service Businesses? (Key Benchmarks)

Google Ads is one of the most popular paid marketing strategies for any industry, and home services is no exception.

google ads benchmarks for home service businesses - lead generation strategies

From our State of the Contracting Call Center report

But with it being so popular, it’s important to stay on top of your performance so you can keep up with competitors and keep costs in check.

And this post is going to help you do just that. We’re going to walk you through LocaliQ’s Home Services Advertising Benchmarks report so you can:

  • Understand how much Google Ads should generally cost for your business
  • Compare your performance to industry averages
  • Make sure you’re not overspending
  • Get the highest ROI

Let’s dive in.

Table of contents

Why advertising benchmarks matter

Analyzing your search ad performance is essential for understanding whether your strategy or ad agency is serving you in the best way. There are two ways to assess your advertising performance:

  • The first is to compare your current and past performance. How are you doing week over week? What about this month compared to last month? How about compared to this month last year? Look at your performance with respect to multiple time frames so that you can pick up on larger trends.
  • The second is to compare your results against others in your industry. This allows you to assess your performance more objectively so you can see how you stack up to competitors and where you need to improve. Benchmarks help answer questions like “Am I overspending?” and “Is it realistic to try and improve my conversion rate?”

How to read these advertising benchmarks

The metrics

The report offers data on four major advertising benchmarks:

  • Average cost per click (CPC): The price you pay, on average, for someone to click on your ad. This is not a fixed rate—Google uses a complex algorithm to determine your CPC (see the infographic here) but two of the most influential factors here are the keyword competition and the quality of your ad.
  • Average click-through rate (CTR): The rate at which people click on your ad. A higher CTR means more people who see your ad click on it. That’s what you want! As long as they are converting…
  • Average conversion rate (CVR): How many of the people who click on your ad convert. You get to define what conversion means, but for home services, this is usually filling out a form on your site or calling your business.
  • Average cost per lead (CPL): Your total ad spend divided by your total number of leads. When you can keep your spend low while driving up your leads, you put–and keep–more money in your pocket!

google ads benchmarks for home service businesses - definitions of cost per click, click through rate, cost per lead, and conversion rate

Ideally, you’re striving to achieve low CPCs and CPLs but higher CTRs and CVRs

The subcategories

The LocaliQ report breaks out home services advertising benchmarks by sub-category, because as you can see in the chart below, their metrics vary significantly. The reason for this is that a customer’s purchasing path varies depending on the service.  A landscaping subscription is a drastically different experience than a roof replacement, for example. So it’s important to look at your subcategory when assessing your performance.

  • Air conditioning installation and repair
  • Air conditioning sales
  • Construction & contractors (general)
  • Heating & furnaces
  • Landscaping
  • Pest & rodent control
  • Plumbing
  • Pools & Spas
  • Roofing & gutters

google ads benchmarks for home service businesses - overall average cpc, ctr, cvr, cpl

Original data source: WordStream by LocaliQ

Okay, now that you understand the basics of the report, it’s time to dive in.

Average click-through rate for home services advertising

The average CTR across the home services industry is 4.8%, but there is a lot of variation among sub-categories.

While plumbing saw the lowest CTR at 3.34%, construction and general contractors landed at nearly double that rate, with a 6.25% CTR. This makes sense since someone searching for a general contractor or construction project is going to do more research, and therefore more clicking around, than someone looking for a plumber.

google ads benchmarks for home service businesses - average click-through rate

Original data source: WordStream by LocaliQ

Quick tips to improve your Google Ads click-through rate:

  • Write compelling ad copy with promotions, trust signals, and social proof.
  • Make sure you are targeting the right audiences and catering your ad copy accordingly.
  • Include an actual call to action in our ad copy, such as “call today” or “get a free estimate.”

Average cost per click for home services search advertising

In the home services advertising space, the average CPC is $6.55. Again, though, the range across sub-categories is wide. Roofing & Gutter businesses pay the highest CPC, at an average of $11.13, while Pools & Spas and Construction & General Contractors are tied for the lowest CPC at $3.60.

google ads benchmarks for home service businesses - average cost per click

Original data source: WordStream by LocaliQ

It’s worth noting that CPC is only part of the equation. Before you balk at your CPC, consider other metrics, like your CVR and CPL. If you’re paying a lot for ads, but it’s generating significant results—meaning tons of new leads that become high-value customers—then the CPC may be worth it.

And in some cases, you simply can’t get a lower CPC due to the competition level of the keywords you are bidding on.

Quick tips to improve your Google Ads cost per click:

  • Keep the language consistent from ad to landing page.
  • Make sure your ads and landing pages are relevant to the keywords you are bidding on.
  • Target only one keyword theme per ad group so you can keep things relevant.

Average conversion rate for home services search advertising

The average CVR for home services ads is 10.22%, whereas the average across all industries is 6.6%.

That’s good news for home service businesses! A higher CVR likely means that many consumers clicking home services ads are high-intent searchers. They’re actively seeking a solution to their problem, not just casually browsing.

google ads benchmarks for home service businesses - average conversion rate

Original data source: WordStream by LocaliQ

Quick tips to improve your Google Ads conversion rates:

  • Keep your landing pages clean and organized.
  • Include testimonial quotes, reviews and ratings, and other trust signals on your landing page.
  • Ask only for the essential information in your forms.

Note that these landing page optimizations can apply to any of your lead generation strategies, not just paid search ads.

Average cost per lead for home services search advertising

The average across all home services is $66.02, but again, there’s wide variation across sub-categories.

Roofers are paying the steepest price for their advertising, with each lead costing an average of $186.79. Pool & Spa businesses, on the other hand, are paying only $29.08 on average for each lead.

google ads benchmarks for home service businesses - average cost per lead

Original data source: WordStream by LocaliQ

When considering this discrepancy, it’s important to look further down the road. A roofer may pay a lot to acquire a lead, but the contract for roof replacement can be as high as $36,000.  A pool and spa business may be paying less per lead, but a hot tub is closer to $7,000.

How to improve your Google Ads cost per lead

Cost per lead comes down to how well your other metrics are performing. If you follow the tips above, you can lower costs while increasing conversions, ultimately improving your CPL.

For more general marketing tips, we have some resources for you:

Use these Google Ads benchmarks to improve your performance

Industry advertising benchmarks can help you understand how your home services business is performing compared to your peers and where there’s room for improvement. And once you’ve gotten the hang of your advertising KPIs, you can then take a look at how to convert those leads into customers. Use the benchmarks and the tips we’ve provided so you can get the highest returns on your investment and stay competitive in the search ad space.

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