Study Says: Track Jobs, Not Leads

Home services companies that optimize their advertising toward leads are more than four times as likely to lose money on it as companies that optimize toward completed jobs, according to an analysis of more than $84 million in ad spend across 126 US contractors by Lachi Media. Lead-optimized accounts ran their advertising at a loss 37 percent of the time; job-optimized accounts, 8 percent.

The difference isn't budget or skill. It's what the advertising is told to aim for. Google's and Microsoft's automated bidding optimize toward whatever an account marks as a conversion, and for most contractors that is a phone call. Unless an owner actively changes the goal to completed, profitable jobs, the system keeps buying leads, including the ones that end in a service call, a long drive and no sale.

Most owners never see the cost, because their reporting stops at the booked lead. Judged as a share of revenue, the sample's ad spend looked routine at 21%. Measured against gross profit, the money left after paying the technician and buying the parts, it consumed 59 percent.

Roy Danino, CEO and co-founder of Lachi Media:

A lead is not a job, and a job is not profit. The algorithm optimizes toward whatever you tell it a conversion is. Almost every contractor in America tells it a phone call is a conversion, so the system gets very good at buying phone calls, including the ones that lose money. Most owners never see it, because the report they're handed ends at the call.

Lachi Media

The Companies That Fixed it Weren't the Big Ones

The study's sharpest result cuts against the assumption that scale wins in digital advertising. Among the smallest advertisers in the sample, some spending under $50,000 a year, those that measured advertising by completed jobs earned a median return of $1.69 in gross profit per ad dollar, statistically level with the $1.80 earned by the largest company in the study, a multi-market operator spending $20 million. Nearly half of the small advertisers beat it. Whatever the budget, the companies that measured the same way landed in the same profitable range.

"The large operators have known this for years. They measure advertising by what a job is actually worth, and they bid accordingly," Danino said. "The technology to do the same thing is now available to a company running two trucks. The gap was never the budget. It was the measurement."

Lachi Media

Why Most Contractors Haven't Changed It

If the fix were simply flipping a setting, the losing group would be small. It was the majority, and the reasons are structural, not carelessness. The platforms optimize for leads out of the box. Capturing what a job is actually worth requires connecting a CRM or field-service system back to the ad account, an integration most small shops never set up. And agencies build their monthly reports around leads because leads are what's easy to count. The result is an entire industry optimizing toward a number that has little to do with profit, mostly without realizing there is another option.

The effect was not limited to Lachi Media's own clients. Of the 126 accounts, 43 belong to companies the agency observes but does not manage. Within that independent group the same pattern held. Lead-optimized accounts lost money 40% of the time versus 12% for job-optimized accounts, indicating the finding reflects how advertising is measured, not who manages it.

Lachi Media

What Changed When the Measurement Changed

In one of Lachi Media's own published case studies, the agency restructured a large US home services company's campaigns around individual markets and service categories, feeding closed-job revenue back into the bidding, and doubled revenue from Google Ads while cutting advertising spend by 34%. The gains came from redirecting budget away from high-volume, low-margin work toward jobs the company could staff and complete profitably.

"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," said Laura Heritage, VP of Partnerships at ClickTech.