If you ever felt ripped off by HomeAdvisor, Thumbtack, or Angi — that wasn't paranoia. The federal government agreed with you.
The FTC investigation found HomeAdvisor was selling leads that "didn't match contractor profiles" and misrepresenting leads as "ready to hire" when most were just browsing.
But here's what the settlement doesn't fix: the entire pay-per-lead model is fundamentally broken — and it was designed that way.
(Industry Avg)
Shared Lead
(vs 35% Referrals)
The Numbers Don't Lie
According to Siana Marketing's 2025 contractor report, lead aggregators charge $90–$180 per lead on average — and that same lead gets sold to 3-5 other contractors simultaneously.
The result? An industry-worst 8% conversion rate. Compare that to referrals (35-40%) or even Google Local Service Ads (25-40%).
"I spent $2,000 a month for eight months and got nothing. Not a single profitable job. Just excuses."
— Anonymous HVAC Contractor, Relentless Digital SurveyHe's not alone. According to research from Sixth City Marketing, 62% of home service companies cite finding new clients as their biggest challenge. And nearly 98% of contractors we've spoken to have already been burned by someone calling themselves a "marketing expert."
HomeAdvisor's own BBB profile tells the story: 1 out of 5 stars from hundreds of contractor reviews. The primary complaints? "Low-quality leads" and "tire-kickers who ghost."
"Even if you never get a hold of the client, you get charged $30 just like the 5 other people... In one case, a customer was contacted by 12 different businesses after submitting one request. DO NOT USE Angi/HomeAdvisor."
— r/Construction thread, 2024
The Regulatory Hammer Falls
In 2025, the FCC implemented new rules requiring "one-to-one consent" for marketing calls — effectively banning the old practice of selling one lead to multiple contractors without explicit consumer permission.
The fact that regulators had to step in tells you everything about how broken this system was.
But here's what the headlines miss: two things changed in the last 18 months that made lead aggregators obsolete for contractors willing to adapt.
The Facebook Algorithm Shift Nobody Talked About
In late 2024, Meta quietly rolled out an AI overhaul called "Andromeda" — and it fundamentally changed how Facebook ads work.
According to Meta's own engineering briefings, Andromeda uses deep learning to show the right ad to the right person at the right time. The key shift? It reduces reliance on manual targeting and rewards creative diversity.
Advertisers who adapted saw 8-10% average performance improvement. Those who enabled Advantage+ creative features saw a 22% increase in return on ad spend.
For contractors, this means Facebook's AI will now do most of the targeting work for you — if you know how to feed it properly.
The Second Shift: AI Got Smart Enough
The second change? ChatGPT got good enough to replace the $5,000/month marketing strategist sitting in some agency's office.
It's been trained on every marketing book written in the last 100 years — while most "experts" haven't read one. The same AI that writes Fortune 500 ad campaigns can now write yours.
What's been missing is a system that puts these two shifts together — so contractors can generate their own exclusive leads without:
✗ Learning complex marketing theory
✗ Hiring expensive agencies
✗ Competing for scraps on lead platforms
What Top Contractors Are Doing Instead
According to Josh Crouch of Relentless Digital, who tracks ROI data across 200+ contractors:
• The bottom 25% still see 300-400% annual ROI
• Typical clients see 400-600% ROI
• Top performers hit 600-2000%+ ROI
• The elite 5% achieved 2000-11,000% ROI
One previously skeptical HVAC contractor spent $4.5k/month on a comprehensive digital approach and went from $3M to $6.2M revenue in 12 months — a 1,644% ROI.
The difference between the bottom and top performers? They stopped buying leads and started printing them.