What's the right way to compare Local Services Ads to my other marketing channels?
Not on cost per lead. Every channel defines a lead differently, so that comparison is arithmetic on incompatible denominators. Compare on cost per booked job, then cost per completed job, then marketing cost as a share of the revenue that channel produced. Add average ticket by source as a fourth number, because a channel can look cheap per job and still be the wrong place to spend the next dollar.
Why cost per lead misleads across channels
An LSA lead is a contact that met a defined bar. A search lead might be a form fill from someone comparing prices. A direct mail lead might be a call from a name on a list. Dividing spend by those three counts produces three numbers that cannot be ranked against each other, and the channel with the loosest definition always looks cheapest.
The fix is to move the denominator downstream to something every channel defines identically: a job that got scheduled, and then a job that got completed.
The four numbers, in order
- Cost per booked job = channel spend ÷ jobs booked from that channel. First honest comparison point.
- Cost per completed job = channel spend ÷ jobs completed. Channels differ meaningfully in cancellation and no-show rates, and this is where that shows up.
- Average ticket by source = channel revenue ÷ completed jobs. Two channels with identical cost per completed job are not equivalent if one produces service calls and the other produces replacements.
- Marketing cost as a share of channel revenue = channel spend ÷ channel revenue. The number you actually manage against, because it is comparable to your gross margin.
Use net spend and say which period you mean
LSA credits from disputes land on later invoices, so gross spend overstates cost and current-period net spend understates it until the cycle closes. Pick a basis, state it on the report, and hold it constant across channels. Reports that quietly change basis between quarters are how a channel gets killed for the wrong reason.
The same discipline applies to the time window. A click in March that becomes a booked job in April belongs somewhere specific, and the rule should be written down rather than decided by whoever built this month's spreadsheet.
The decision this is actually for
These numbers exist to answer one question: where does the next dollar go. That is a marginal question, not an average one. A channel with an excellent average cost per completed job may be fully saturated, so additional spend there buys nothing — the classic case being an LSA account that is not budget-capped and simply cannot spend more.
Watching cost per completed job as spend increases, rather than as a single monthly average, is what separates real allocation work from reporting. That is the job of marketing intelligence, built on the lead-to-invoice join described under revenue intelligence.
Topics: cost per booked job · channel comparison · unit economics · formulas
Have a version of this question about your own business?
The useful answer usually depends on which systems you run and how they're connected. That's a conversation, not a blog post.