Local search is the highest-intent traffic in digital advertising. 81% of consumers research products online before purchasing, and nearly 60% would pay more to support a local business.
When someone searches "plumber near me" or "emergency dentist," they're not browsing—they're ready to buy. AI is transforming how local businesses compete for this traffic.
The Local Advertising Landscape
Local searches signal immediate need. The customer journey is compressed—from search to purchase in minutes or hours, not days or weeks.
The Two Pillars of Local PPC:
- •Google Local Services Ads (LSAs): Pay-per-lead ads that appear above traditional search results for service businesses.
- •Performance Max for Store Goals: AI-driven campaigns that drive foot traffic across Google's full inventory.
Google Local Services Ads: The Pay-Per-Lead Model
LSAs appear at the very top of search results. The model differs fundamentally from standard PPC:
- •Pay-per-lead, not pay-per-click. You only pay when a potential customer contacts you.
- •Google handles most setup. Less control, but also less complexity.
- •Trust signals built in. The Google Verified badge tells customers Google has vetted your business.
LSA Ranking Factors:
- •Review score and volume. The single most important factor.
- •Responsiveness. Leads responded to within 5 minutes have 78% higher chance of qualifying.
- •Proximity. How close your business is to the searcher.
- •Business hours. Availability during search times.
- •Bid amount. One of several factors, not the primary one.
LSA Optimization: Manage reviews aggressively, respond fast, optimize radius targeting, dispute invalid leads, and track lead quality.
Performance Max for Store Goals
Performance Max campaigns leverage Google's AI to optimize across all Google inventory based on your store goals:
- •Store visits (measured via location data)
- •Call clicks
- •Driving direction requests
- •Website visits with local intent
Setting Up PMax for Local
- • Connect Google Business Profile (non-negotiable)
- • Define conversion goals precisely
- • Provide strong, diverse assets
- • Set geographic targeting precisely
Local Asset Optimization
Include location references in headlines, emphasize local benefits in descriptions, feature actual storefront in images, and use real location videos over stock footage.
AI Optimization for Local Campaigns
Smart Bidding for Local
- • Maximize Conversions: Optimizes for most local actions within budget.
- • Target CPA: Targets specific cost per local action.
- • Maximize Conversion Value: Optimizes for total value if you've assigned different values to actions.
AI-Powered Audience Targeting
- • Location targeting identifies users likely to visit your area
- • Interest and behavior signals identify purchase-ready users
- • Lookalike expansion finds users similar to your converters
Voice Search Optimization
Over 1 billion consumers use voice search daily in 2025. Write assets the way people speak, answer common questions, and ensure mobile optimization.
Measuring Local Campaign Performance
- •Store visits: Google estimates physical visits from users who saw your ads.
- •Call clicks and duration: Track quality, not just click-to-call.
- •Direction requests: Strong indicator of purchase intent.
- •Cost per local action: Your true efficiency metric.
Offline Conversion Tracking: Import CRM data, track phone conversions with CRM integration, and enable enhanced conversions for better attribution.
LSAs vs. Search Ads: When to Use Each
LSAs work best when:
- •You're in an eligible service industry
- •Your reviews are strong (4.0+ stars)
- •You can respond to leads quickly
- •You want simpler campaign management
Traditional Search Ads work best when:
- •You need more control over messaging and targeting
- •You're targeting specific keywords
- •Your industry isn't eligible for LSAs
- •You're scaling beyond what LSAs can deliver
The combination approach: LSAs capture high-intent local searches with pay-per-lead efficiency. Search campaigns fill gaps and provide brand presence.
Best Practices for Local AI Advertising
- •Start with your Business Profile. Foundation for all local advertising.
- •Prioritize reviews. Active review management is essential.
- •Respond fast. Speed matters for ranking and conversion.
- •Track beyond clicks. Implement call tracking, CRM integration, and offline conversion tracking.
- •Test geographic targeting. Radius, location groups, and targeting modes all affect performance.
- •Provide quality assets. AI optimization works better with more high-quality inputs.
The Bottom Line
Local advertising is entering a new phase where AI handles much of the tactical complexity while humans focus on strategy, creative, and customer experience.
The opportunity:
- •Highest-intent traffic in digital advertising
- •Pay-per-lead models (LSAs) reduce risk
- •AI-powered optimization across all Google inventory
- •First-mover advantage in local markets still exists
The requirements:
- •Strong Google Business Profile
- •Active review management
- •Fast lead response systems
- •Proper conversion tracking
- •Quality creative assets
Local businesses that master these fundamentals—then layer AI optimization on top—will capture disproportionate share of local search intent.
