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Update to Google’s Bidding System

Google app on phone
Caitlin deBoer

Paid search ads are one of the most effective ways to put your business in front of potential customers. With Local Services Ads (LSAs), you can connect directly with qualified leads, and only pay when the phone rings. The bidding system has recently been update, so in this post, we'll explain more about the Google Auction bidding system and what the updates mean for your business.

What is Google's Auction based bidding system?

Google began offering bidding on LSAs for home services companies and law firms nationwide, giving business owners greater control over their marketing budgets and success. Read this post for more information.

Recent updates/changes by Google

  • Update to the LSA Portal

    • Set max per lead Bid option no longer has a cap. As mentioned above, Google released the bidding system with a max bid allowed per profile based on location and business type. The prior max was capped at 2.5x the min bid for that profile. The min bid was determined by the previous CPL for that profile before auction based bidding was introduced to the LSA world

    • When setting a bid now, the portal allows ay bid to be set (the cap being 100x the min bid, so essentially no cap at all)

  • Update on Google’s end

    • Google still has a max bid cap on the backend of LSAs, meaning that no matter how high we set the bid in the portal Google will not charge higher than that bid they have set on their end. Google no longer is sharing any specifics externally.

    • They have communicated that they are testing the market to determine what providers are willing to pay by how high they are setting their bids at. After gathering this information they will use the data to set a new max on the backend.

    • This is a short term project for Google, as they have confirmed that eventually there will be no max on the backend, seemingly mimicking the portal parameters.

    • Google has not confirmed a timeline for this, but we are estimating that by end of year, LSAs will no longer have a max bid cap- pushing them towards a search (PPC) like system.

With these updates, this is no longer a “set it and forget it” approach. Managing LSAs has become a little more involved, which is why you might want to consider having a company like Scorpion help you manage your ads.

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