Emily Williams of Googles Inside AdWords crew explains more:

Weve heard from many of you whove already switched to location extensions that campaign management and attracting customers in your area is now simpler and more effective. With location extensions, you can deliver more exposure and local relevance by using the same ads for all your business locations without the overhead of maintaining a different ad for each location.

This feature allows you to include information such as your business name, address and phone number in your existing text ads. When a potential customer performs a search, their location or search terms are dynamically matched to your business locations, and your most relevant location appears within your ad on Google.com and Google Maps.

Google wants to make the transition as painless as possible, so are giving advertisers two options:

1. Upgrade your local business ads to text ads with location extensions.To take full advantage of the benefits of location extensions and ensure a seamless transition of your local business ads, we encourage you to update your ads through the five simple stepsoutlined on our website.

2. Automatically transition your local business ads. If you choose not to take any action, in the coming weeks, campaigns containing local business ads will be automatically enabled with location extensions using addresses from your local business ads. Well also replace your local business ads with new ads that are compatible with location extensions. While any of your addresses may now appear with the standard text ads in your campaign when relevant, each transitioned local business ad will continue to be linked to a single address and will only show to people near that address.

For AdWords advertisers who want to learn more about this new enhancement then check out the video below or visit www.google.com/adwords/lbatransition.