Google has unleashed a new feature in AdWords and is making it available to all U.S. advertisers. The feature is called Product Extensions and it uses information from an advertiser's account in Google Merchant Center.
Product extensions allow images to be shown with your ad. However, unlike Product Listing Ads which are available on a Cost-Per-Action (CPA) basis, product extensions are available on a Cost-Per-Click (CPC) basis. The ads include a plusbox, which expands the ad. Advertisers will not be charged when a user simply clicks the plusbox - only when a user actually clicks through to the site.
Additionally, product extensions offer more control than product listing ads. For example, product extensions will only be triggered for ads by keywords set up in your campaign. And you can control which products appear in an ad. With Product Listing Ads, Google chooses these options for advertisers.
In order to use product extensions, go to your Google Merchant Account and add your AdWords account ID. Then, under the "Campaign Settings" in AdWords, look for "Ad Extensions" and choose "Use product images and information from my Google Merchant Center account."