Cost per lead tells you what you spent. It says nothing about what you earned. To know whether Local Services Ads is actually a profitable channel, you need return on ad spend. This guide covers how to calculate LSA ROAS — the formula, what revenue to include, the mistakes that inflate it, and why it beats every cost-only metric for judging the channel.
The formula
ROAS is straightforward:
- ROAS = revenue from LSA-booked jobs ÷ LSA spend, over the same period.
If you spent $4,000 on LSA and the jobs you booked from LSA leads produced $20,000 in revenue, your ROAS is 5 — commonly written 5x or 500%. That means every dollar of LSA spend returned five dollars of revenue. The math is trivial; the discipline is in getting the two inputs right.
Getting the numerator right: attributing revenue
The spend figure comes straight from your LSA billing. The revenue figure is the hard part, because Google does not attribute revenue for you — it only knows a lead happened and whether it was charged. To fill in the numerator you have to:
- Tag each LSA lead as booked or not, and record the job value when it books.
- Count only revenue traceable to LSA leads — not organic calls or referrals that happened to close the same month.
- Use a consistent revenue definition: invoiced amount, collected amount, or contract value — pick one and hold it.
Skip this and you either can't compute ROAS at all, or you inflate it by crediting LSA with revenue it didn't produce.
Match the time windows or the number lies
The most common ROAS error is a timing mismatch. Home-service jobs booked from this month's leads may not invoice until next month, so if you divide this month's revenue by this month's spend, you are mixing cohorts. Two clean approaches:
- Cohort by lead date — attribute each job's revenue back to the period its lead came in. Most accurate, more bookkeeping.
- Rolling window — use a trailing period (say, the last 90 days) for both revenue and spend, so timing noise averages out. Easier, good enough for trend.
Worked example
| Input (illustrative) | Value |
|---|---|
| LSA spend (period) | $4,000 |
| LSA leads | 90 |
| Jobs booked from LSA | 22 |
| Average job value | $950 |
| Revenue from LSA | $20,900 |
| ROAS | 5.2x |
Revenue ROAS vs. profit ROAS
A 5x revenue ROAS sounds great, but revenue isn't profit. If your gross margin on a job is 40%, that $20,900 in revenue is about $8,360 in gross profit against $4,000 in spend — a profit-based ratio closer to 2.1x. Both numbers are legitimate; they answer different questions. Revenue ROAS is fine for comparing periods and channels. But when you decide whether the channel truly pays, run it on margin, because a high revenue ROAS in a thin-margin trade can still lose money after costs.
Why ROAS beats cost per lead
Cost per lead is a spend metric with no revenue in it, so it cannot tell you if LSA is profitable — only that leads were cheap or expensive. ROAS folds three things you care about into one number: lead quality (do they book?), booking rate (how well you convert), and job value (how much each is worth). A low cost per lead paired with a weak ROAS is the classic trap — cheap leads that never turn into money. Manage the cost metrics day to day, but let ROAS, computed on real booked revenue, be the number that decides the budget.
Frequently asked questions
How do you calculate ROAS for Local Services Ads?
ROAS is revenue from LSA-booked jobs divided by LSA spend over the same period. If LSA spend was $4,000 and jobs booked from LSA leads produced $20,000 in revenue, ROAS is 5, often shown as 5x or 500%. You must attribute the revenue to LSA leads, which Google does not do for you.
What is a good ROAS for LSA?
A good ROAS depends on your margins, not a fixed number. A high-margin trade can thrive at a lower ROAS than a thin-margin one. The more useful test is whether your gross profit from LSA jobs exceeds LSA spend by enough to justify the channel, so calculate a profit-based ROAS using margin, not just top-line revenue.
Why is ROAS better than cost per lead for judging LSA?
Cost per lead only counts what you spent, not what you earned, so it cannot tell you if the channel is profitable. ROAS ties spend to revenue actually produced, capturing lead quality, booking rate, and job value in one number. A low cost per lead with a poor ROAS means cheap leads that do not turn into money.