Performance Max vs Search Campaigns: Which Google Ads Type Works Best for Local Businesses
Understand the fundamental differences between PMax and Search campaigns, how to run them together without cannibalization, and where Local Service Ads fit into your Google Ads strategy.
What You'll Learn
- The fundamental difference between Performance Max and Search campaigns
- Which campaign type generates cheaper leads for local service businesses
- How to run both together without cannibalizing your own ads
- Budget allocation strategy: how much to put in each campaign
- Where Local Service Ads (LSAs) fit into the picture
Introduction
Google Ads gives local service businesses two primary campaign types: Search campaigns (your ads show when someone Googles "plumber near me") and Performance Max (Google's AI shows your ads across Search, YouTube, Gmail, Maps, and Display -- all from one campaign).
The debate between PMax and Search has raged since Google launched Performance Max in 2021. And the answer most PPC agencies won't tell you? 73% of accounts perform best running both together. It's not a choice between one or the other. It's about understanding what each does well and allocating your budget accordingly.
This guide breaks down exactly how each campaign type works, what results to expect, and how to combine them for maximum lead generation in your local market.
Search Campaigns: Precision Targeting for High-Intent Leads
How Search Campaigns Work
When someone types "emergency AC repair Sacramento" into Google, Search campaigns let you show a text ad at the top of results. You choose the keywords. You write the ads. You control the bids.
This is the most straightforward form of Google Ads: someone searches for what you offer, they see your ad, they click, they call.
Why Search Campaigns Excel for Local Businesses
High intent, high conversion. The person searching "plumber near me" needs a plumber right now. They're not browsing -- they're buying.
You control what triggers your ads
Choose exact keywords like "hvac repair near me" or "licensed electrician [city]"
Full transparency
See exactly which search terms triggered your ads and how much each click cost
Negative keywords
Block irrelevant searches like "diy plumbing" or "plumber salary" from wasting your budget
Higher conversion rates
People clicking Search ads are actively looking for your service
Search Campaign Benchmarks (2025)
| Metric | Local Services Avg |
|---|---|
| Click-through rate (CTR) | 5.2% |
| Conversion rate | 4.7% |
| Average CPC | $7.85-$12.18 |
| Cost per lead | $91-$129 |
Search Campaign Limitations
Only reaches people actively searching. Misses the 95% of potential customers who haven't searched yet
Competitive CPCs. Popular keywords like "plumber near me" can cost $15-$25 per click in large markets
Text-only format. No images, no video -- just headlines and descriptions
Requires keyword research. You need to know (or discover) what your customers search for
Performance Max: Google's AI-Powered Multi-Channel Campaign
How Performance Max Works
You give Google a budget, a set of creative assets (headlines, descriptions, images, videos, logos), and a conversion goal. Google's AI then decides:
Essentially, you hand Google the keys and say "get me leads." The AI figures out the rest.
Why PMax Appeals to Local Businesses
Reach across all channels
Your ad can appear on YouTube, Gmail, Google Maps, and websites -- not just Search results
Less setup
One campaign instead of managing separate Search, Display, and YouTube campaigns
AI optimization
Google's algorithm finds customers you might miss with keyword targeting alone
Remarketing built in
PMax automatically re-targets people who visited your website but didn't convert
PMax Benchmarks for Home Services (2025)
| Metric | PMax Local Services Avg |
|---|---|
| Conversion rate | 5.8% |
| Cost per lead | $41-$90 (varies widely) |
| Click-through rate | 2.1% (lower due to Display/YouTube inventory) |
| Reach | 5-10x broader than Search alone |
Important context on that CPL number
PMax's lower cost per lead partly comes from cheaper inventory (Display and YouTube clicks cost $0.50-$3 vs $8-$15 for Search clicks). But those cheaper clicks also convert at lower rates individually. The blended average can look great on paper while masking that many of those "conversions" are lower-quality leads.
PMax Limitations
Limited control. You can't choose specific keywords or placements (though negative keywords were added in 2025)
Black box reporting. You won't always know which channels or search terms drove your conversions
Requires strong creative assets. If you only provide headlines and descriptions (no images/video), PMax defaults to Search and Display text ads -- losing its multi-channel advantage
Learning period is expensive. PMax needs 6+ weeks and $50-$100/day minimum to optimize properly
Can cannibalize Search. Without proper setup, PMax may "steal" conversions from your existing Search campaigns, inflating its own numbers
The Cannibalization Problem (And How to Fix It)
This is the biggest concern local businesses have with PMax: if you run both PMax and Search, won't PMax just bid on your Search keywords and take credit for conversions Search would have gotten anyway?
The honest answer: this was a real problem before 2025. Google has since added controls to prevent it.
2025 Fixes
How to Prevent Cannibalization
Add brand keywords as negatives in PMax
Your brand name searches should go to your Search campaign, where you control the ad copy and landing page
Use exact match keywords in Search
This tells Google to prioritize your Search campaign for those terms
Monitor Search impression share
If your Search campaign's impression share drops after launching PMax, cannibalization is happening
Check PMax's channel breakdown
If 80%+ of PMax conversions come from the Search channel, it's mostly duplicating your Search campaign -- not adding new reach
The Best Setup: Running Both Together
The data is clear: most successful local advertisers run Search AND PMax together. Here's the proven framework:
Search First (Months 1-2)
Launch with Search campaigns only:
- Build conversion data (30-50 conversions minimum)
- Identify your highest-converting keywords
- Establish your baseline cost per lead
- Set up proper conversion tracking (calls, forms, bookings)
Why Search first: You need clean conversion data before giving Google's AI control. PMax without conversion history burns budget while it learns.
Add PMax (Month 3)
Once Search is generating consistent leads:
- Launch PMax with a separate budget (don't pull from Search)
- Upload strong creative assets (15+ headlines, 5+ descriptions, 20+ images, at least 1 video)
- Add your brand keywords and top Search keywords as PMax negatives
- Set audience signals pointing to your ideal customer profiles
Optimize the Split (Months 4+)
Monitor and adjust budget allocation:
- Track cost per lead for each campaign separately
- Shift budget toward whichever campaign delivers cheaper qualified leads
- Use PMax's channel reporting to understand where your ads perform best
- Test different PMax asset groups for different services
Budget Allocation Guide
| Total Monthly Budget | Search | PMax | Rationale |
|---|---|---|---|
| Under $2,000 | 100% | 0% | Not enough budget for PMax learning period |
| $2,000-$3,000 | 70% | 30% | Search-heavy, PMax for incremental reach |
| $3,000-$5,000 | 60% | 40% | Balanced approach, both can learn |
| $5,000-$10,000 | 50% | 50% | Even split, maximize both channels |
| $10,000+ | 40% | 60% | PMax scales better at higher budgets |
Where Local Service Ads (LSAs) Fit In
Google has a third option specifically for service businesses: Local Service Ads (LSAs). These appear above both Search and PMax ads at the very top of Google results.
LSA vs Search vs PMax Comparison
| Feature | LSAs | Search | PMax |
|---|---|---|---|
| Placement | Top of Google (above all other ads) | Top of search results | Across all Google channels |
| Pricing | Pay per lead (not per click) | Pay per click | Pay per click |
| Avg cost/lead | $25-$75 | $91-$129 | $41-$90 |
| Trust signal | "Google Guaranteed" badge | None | None |
| Control | Very limited | Full | Limited |
| Requirements | Background check, license verification | None | None |
| Best for | Emergency/urgent services | High-intent keyword targeting | Multi-channel reach |
The Optimal Three-Campaign Stack
For local service businesses with adequate budget ($3,000+/month), the ideal setup is:
LSAs
Capture top-of-page leads at the lowest cost per lead
Search
Target specific high-intent keywords with full control
PMax
Expand reach across YouTube, Display, Gmail, and Maps
This three-layer approach covers every stage of the customer journey: LSAs catch ready-to-buy customers, Search captures active researchers, and PMax builds awareness and remarketing.
PMax Asset Requirements: What You Actually Need
PMax runs on creative assets. The more (and better) assets you provide, the more placements Google can use.
Minimum vs Recommended Assets
| Asset Type | Minimum | Recommended | Pro Tip |
|---|---|---|---|
| Headlines (30 chars) | 3 | 15 | Include service name, city, and benefit |
| Long headlines (90 chars) | 1 | 5 | Include call-to-action and differentiator |
| Descriptions (90 chars) | 2 | 5 | Cover different angles (price, speed, trust) |
| Images (landscape) | 1 | 10+ | Real job photos outperform stock images |
| Images (square) | 1 | 10+ | Before/after photos work exceptionally well |
| Images (portrait) | 0 | 5+ | Good for YouTube and Discover placements |
| Videos | 0 | 3+ | Even a 30-second phone video beats no video |
| Logos | 1 | 2 | High resolution, square + landscape |
Asset Group Strategy for Local Businesses
Create separate asset groups for each major service:
Asset Group 1
Emergency/Repair services (urgent messaging, 24/7 availability)
Asset Group 2
Installation/Replacement (investment messaging, financing options)
Asset Group 3
Maintenance/Prevention (value messaging, subscription offers)
Each asset group should have its own landing page, images, and messaging tailored to that service type.
Common PMax Mistakes for Local Businesses
1. Launching PMax Without Conversion History
How to Fix It:
Run Search for 60 days first to build 50+ conversions.
2. Only Providing Text Assets (No Images/Video)
How to Fix It:
Upload at least 20 images and 1 video. Without visual assets, PMax defaults to text-only placements and loses its multi-channel advantage.
3. One Giant Asset Group for Everything
How to Fix It:
Create separate asset groups per service category. "AC repair" and "AC installation" are different customers with different intent.
4. Not Using Brand Exclusions
How to Fix It:
Add brand keywords as negatives in PMax from day one. Let your Search campaign handle brand traffic (it's cheaper and you control the messaging).
5. Insufficient Budget for Learning
How to Fix It:
PMax needs $50-$100/day minimum for 6 weeks. If your total budget is $1,500/month, put it all in Search instead.
6. Expecting Immediate Results
How to Fix It:
Give PMax 6-8 weeks before evaluating. The AI needs time to learn which audiences, placements, and creative combinations drive conversions for your business.
Quick Reference: PMax vs Search Decision Matrix
| Scenario | Recommendation |
|---|---|
| Total budget under $2,000/month | Search only |
| New account, no conversion data | Search first, PMax after 50 conversions |
| Budget $3,000+, mature account | Both (60/40 Search-heavy) |
| Budget $5,000+, strong assets | Both (50/50 or PMax-heavy) |
| Emergency services (plumbing, HVAC) | LSAs + Search (PMax optional) |
| Installation/project services | Search + PMax (LSAs optional) |
| Want maximum control/transparency | Search only |
| Want maximum reach/volume | PMax + Search |
Frequently Asked Questions
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