Performance Max vs Local Service Ads: Which is Best for You?

When you log into a brand-new Google Ads account, the very first screen can be incredibly overwhelming.

Google asks you to pick a "Campaign Type," and suddenly you are staring at a massive list of options: Search, Display, Performance Max, Video, App, Smart, and Local Service Ads.

If you pick the wrong one, you could end up burning your marketing budget on the wrong audience.

As a Google Ads Certified Expert, the two campaign types I get asked about the most are Performance Max and Local Service Ads.

They are two of Google's newest and most powerful tools, but they are built for entirely different types of businesses.

Let's break down exactly what they are, how they work, and which one you should be running.

What Are Google Local Service Ads?

If you are a plumber, electrician, lawyer, or HVAC technician, this is the most important section you will read today.

What are Google Local Service Ads (LSAs)? Local Service Ads are a specialized type of campaign built exclusively for local service businesses. When someone in your city searches for "plumber near me," LSAs appear at the very, very top of Google—even higher than the normal Search Ads and the Google Map pack.

They look like small, rectangular badges that show your business name, your Google review rating, and a green checkmark that says "Google Guaranteed."

The biggest advantage of Local Service Ads: Unlike normal Google Ads where you Pay-Per-Click (meaning you pay even if they just look at your website and leave), with LSAs, you only pay when the customer actually calls you.

If they call you, and it turns out to be a spam caller or someone looking for a service you don't offer, you can actually dispute the charge with Google and get your money back!

Who should use LSAs? Any local service provider (plumbers, locksmiths, cleaners, lawyers, real estate agents) whose main goal is to get their phone to ring.

What is Performance Max Campaigns (Google Ads)?

If Local Service Ads are a scalpel, Performance Max (PMax) is a sledgehammer.

What is Performance Max campaigns Google Ads? Historically, if you wanted to run ads on Google Search, YouTube, and Gmail, you had to build three separate campaigns. Performance Max is Google's all-in-one AI campaign.

You give Google your budget, your target audience, and your "Assets" (more on that below).

Then, Google's artificial intelligence automatically runs your ads across every single piece of Google real estate—Search, Maps, Display, Gmail, and YouTube—simultaneously.

What are Assets in Google Ads? In a PMax campaign, you don't write one specific ad. Instead, you upload a bucket of "Assets": 10 different headlines, 5 descriptions, a few images, and a video. Google's AI will constantly mix and match these assets to figure out which combination gets the most clicks.

Who should use Performance Max? PMax is incredibly powerful for eCommerce brands trying to sell physical products, or large businesses with massive budgets who want to dominate the entire internet. It requires a lot of data and a large budget to train the AI properly.

(If you are a local plumber, do NOT use PMax. You will end up showing up on YouTube videos when you only want to be on the Search page. Stick to Local Service Ads or standard Search campaigns).

What Are Google Display Ads?

While we are talking about campaign types, we need to address Display Ads, because they are often misunderstood.

What are Google Display Ads? These are the visual banner ads you see on the side of news websites, weather apps, or blogs. They do not appear on the Google Search results page.

Display ads are very cheap, but they have terrible conversion rates.

Why?

Because of intent.

People are reading a news article, not looking to buy a product.

You should only use Display Ads for "Retargeting"—meaning, you only show those banner ads to people who have already visited your website, to gently remind them to come back and finish their purchase.

Which Campaign Type Should You Choose?

If you are a local service provider who wants the phone to ring today: Local Service Ads and Standard Search Campaigns.
If you are an eCommerce brand selling shoes online: Performance Max and Shopping Campaigns.
If you want to remind people who left your website to come back: Display Ads.

If you are still unsure which campaign is right for you, or if you are worried that you are currently wasting money on the wrong Google Ads Cost, it is time to bring in an expert.