All About Google Ads for HVAC: Tracking Leads & Optimizing Ad Costs

Google ads are a core marketing strategy that works in conjunction with organic SEO tactics to put your HVAC business on the map. 

We’ve already detailed the importance of marketing for HVAC businesses in full growth mode. Now we’ll dive specifically into Google ads to understand why the HVAC trade has the highest Google ads conversion rate, at 6.5%, compared to the all-industry average of 4.8%.

But let’s first understand how Google ads work.

What Are Google Ads for HVAC Businesses and How Do They Work?

Google Ads is the most common example of paid advertising, especially in the HVAC trade. There are, overall, three models that all fall in the category of Google Ads:

1. Search Ads

These ads function based on the Pay-Per-Click (PPC) model and typically appear at the top of the Search Engine Results Pages (SERPs).

Based on the PPC model, you get paid every time someone clicks on the ad, but the real benefit comes from the high conversion rate, depending on the targeted keywords. HVAC has an average conversion rate of 6.5% for generalized targeted keywords (“HVAC services near me” , “HVAC installation services”, etc.) but between 15% and 25% for emergency repair keywords.

The effectiveness of the Google Search Ads campaign depends primarily on two factors: how much capital you assign to it and the keywords you target.

2. Display Ads

These are simply the banners that get displayed on other websites and they also function on a PPC system. The difference is that they have rather low click-through rates.

That’s besides the point, though, because their main purpose isn’t to generate revenue or direct leads anyway. Rather, it’s to increase brand visibility and remarket your services to past clients or people who’ve already engaged with your business.

Display ads are typically used as a supplementary marketing channel, once your business has already established a strong presence in the market.

3. Local Service Ads

Local Service Ads help your business rank in the local market, which is exactly what you want as an SMB in full growth cycle. Unlike the previous two ad types, these don’t rely on the Pay-Per-Lead model (PPL), rather than the PPC one.

So, you only pay for every converted lead, instead of paying for each click. As expected, these ads have a considerably higher conversion rate (between 25% and 45%) than PPC-based models, which is why they should be your primary ad model.

But what exactly should you pay for Google Ads and is the investment worth it?

How Much Do Google Ads Cost for HVAC?

The following table breaks down the expected costs of your Google Ads campaign, along with the conversion rates, depending on the model referenced:

An important note here: The Monthly Costs column doesn’t specify the standard costs associated with the respective ads campaign, because there are no standard costs, there’s only what you can and wish to invest. Take those as the recommended ranges based on your company’s size, scope, and resources.

How to Choose the Right Google Ads Model for Your HVAC Business

To put it out plainly, there’s no ‘right’ Google ads model, because all 3 models are useful. A healthy developmental cycle will make use of all for the best results.

The actual differentiator between them is when to use one model over another, so here’s the breakdown:

• Local Service Ads (LSAs): Great as a starter model for new or small HVAC business with little-to-no market presence. LSAs have a higher book rate (around 40-45%), a lower CPL compared to Search Ads, and have no CPC cost (no wasted money on unconverted clicks). If you’re going to kickstart your Google Ads campaign, start with LSAs.
• Search Ads: Search Ads are the next logical step for SMBs with an established market print. You want to rank for emergency services primarily to benefit from the higher conversion rate (15-25%) and build your keyword ranking profile for local searches. A great followup model to LSAs if you’ve set aside a solid Google Ads budget to cover the CPC costs.
• Display Ads: Display Ads is your final marketing strategy, once the previous 2 have already matured, because these don’t target lead generation. The goal of Display Ads is to keep your brand in the public conscience.

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How to Track Leads to Optimize Ad Costs

This may sound unexpected, but a successful Google Ads campaign doesn’t necessarily translate to higher revenue. An optimized campaign can generate a healthy amount of leads at a competitive cost, but still lose you money.

This is where lead tracking comes in, which analyzes what happened after the lead was secured.

The following 3 strategies break down the correct approach:

1. Track Calls

Most HVAC leads convert via the phone, because it’s the most direct form of communication and eliminates the waiting times associated with web contact forms. Unfortunately, Google Analytics can’t link a phone call to a specific website visit, so you can't make the connection reliably.

Dynamic call tracking can, though, by assigning a unique trackable phone number to each visitor based on the ad or channel that brought them to you. The system then tracks the call to the campaign that produced it (the ad group or even a specific keyword or group of keywords).

This eliminates the need for questions like ‘How did you hear about us?’ and records the info log, so you can then assess the effectiveness of your ad campaigns more reliably.

2. Track the Cost-Per-Booked-Job Metric

It may sound counterintuitive, but your Cost-Per-Lead (CPL) metric doesn’t say much about your campaign’s success. That’s because the lead itself doesn’t necessarily translate to revenue. A call or a successfully-submitted web form don’t necessarily become booked jobs.

If your CPL is $104, let’s say, but only 40% of the leads convert to actual booked jobs, then your real CPL is $260. And there’s no way of knowing this exact number without tracking your Cost-Per-Booked-Job metric.

3. Import the Data Back Into Your Google Ads

All the previous tracked information is useless if you just keep it in your dashboard. You need to put it to good use and adjust your ads campaign accordingly.

Google’s bidding tools, like SmartBidding and Target CPA, only make decisions based on the data they’re fed. You can use your CRM software to import all of the data you’ve collected into your ad platform, so that the Google algorithm can optimize your campaign for the calls and clicks that historically converted to actual booked jobs.

Along with having a good business strategy and tracking your KPIs periodically, your Google Ads campaign is critical for your business’s success.

FAQ

How much does a Google Ads campaign cost for an HVAC business?

Google ads campaigns can cost between $500 and $10,000 or more, depending on your business’s size, available budget, and scope. As an SMB, you’ll pay considerably less, because your focus will be on Local Service Ads (LSAs) which have no Cost-Per-Click (CPC) costs.

Larger enterprises will employ all 3 Google Ad campaigns (LSAs, Search Ads, and Display Ads), increasing costs considerably.

Which Google Ads model is the best for a small or medium-sized HVAC business?

As a small or medium-sized business (SMB), you want to start with Local Service Ads (LSAs) thanks to the lower Cost-Per-Lead (CPL) expenses, the higher book rate (25-45%), and no CPC costs.

How can you tell if the Google Ads campaign works?

Track calls, web forms, and booked jobs and compare them against your Google Ads campaign indicators (generated leads, CPC, CPL, etc.). Doing this should tell you if your Google Ads campaign is working as intended or whether adjustment is needed.

What is the most important Google Ads metric?

Your most valuable Google Ads metric is the cost per booked job. That’s because CPL isn’t accurate when it comes to assessing pure lead conversion (not all calls, emails, web forms convert into actual booked jobs, but Google still considers them generated leads).