Local home services companies are more than four times as likely to lose money on their ads when they track leads and phone calls instead of paid jobs.
We analyzed more than $84 million in ad spend across 126 home services companies. The fix wasn’t budget — the smallest shops that measured advertising by profit earned the same return as a company spending $20 million.
Budgeted against revenue, advertising looks routine. Against profit, it’s most of the money.
Home services companies budget advertising as a share of revenue — and by that measure, the spending in this study looked unremarkable. Measured against gross profit, what’s actually left after paying the technician and buying the parts, the same advertising consumed nearly three times as much. That gap is invisible on a standard ad report, because the report stops at the booked lead and never follows the money to what the job earned.
The closer your goal sits to real money, the more your advertising earns.
Automated bidding optimizes toward whatever an account marks as a conversion. Tell it a phone call is the goal, it buys phone calls. Tell it a completed, profitable job is the goal, it buys those. We sorted all 126 accounts by how close their goal sits to actual profit. Return climbed at every step — gross profit earned per dollar of ad spend.
“The ad platforms will optimize toward anything you point them at, which is exactly why pointing them at leads instead of profit gets so expensive. Most advertisers already have the tools to fix this, they just haven’t connected their spend to what a job is really worth. This study puts a hard number on that gap, and it’s bigger than most would guess.”
A shop spending $50,000 earned the same return as an operator spending $20 million.
The assumption in digital advertising is that scale wins — bigger budgets, better data, better results. The study found the opposite where it counts. Among the smallest advertisers, the ones that measured advertising by completed jobs landed in the same profitable range as the largest company in the sample. What separated them from the losers wasn’t budget. It was measurement.
Nearly half of the small advertisers beat the $20M operator outright. The technology the big operators have used for years — bidding on what a job is actually worth — now runs on an account managing two trucks.
If the fix were simply flipping a setting, the losing group would be small. It was the majority.
The platform default
Google and Microsoft optimize toward leads out of the box. Unless you actively change the goal, the system keeps buying calls — most owners don’t know the setting exists.
The integration nobody sets up
Telling the platform what a job is worth means connecting a CRM or field-service system back to the ad account. It’s the step most small shops never take.
Reports built on leads
Agencies build monthly reporting around leads because leads are easy to count. So an entire industry optimizes toward a number with little to do with profit.
The result
Not carelessness — structure. The barriers are real, which is exactly why the companies that cleared them pulled so far ahead of the ones that didn’t.
You don’t need perfect profit accounting to start. You need to climb one rung.
The single highest-leverage change most contractors can make to their advertising costs nothing in media budget — it’s changing what the account is told to aim for. Most of the gain shows up at the first real step, moving off leads and onto jobs.
- Send jobs back, not just leads. Feed completed-job outcomes from your CRM to the ad platform, so it learns which clicks become real work.
- Value the job by revenue. Tell the platform what each job was worth, so it bids toward bigger tickets instead of cheaper calls.
- Value the job by gross profit. The top of the ladder — bid toward what’s left after labor and parts, and the platform chases the work that actually pays.
If you can report qualified leads today but not job values, that isn’t a reason to wait. It’s the next rung.
How the study was run.
Detailed methodology and aggregate results are available to reporters on request. No individual company is identified, and no client-identifiable data is shared.
Advertising that’s measured by profit, at any size.
Lachi Media builds profit-based advertising for home services companies — the same measurement the biggest operators use, run for small and midsize contractors.
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