Google said they are "introducing Shopping ads on image search. Now your ads for related products will appear as shoppers browse Google Images, so they can easily click through to buy from you."
Here is a GIF of it in action:
That means that your existing ads are now automatically eligible to show on image search, so keep that in mind.
Also, for local inventory, advertisers can enable people to buy online pickup in store by adding a store pickup link to the Google-hosted local product page. This is the page that appears after a user clicks your local inventory ad.
They also announced a few more things, so check it out.
This should be no surprise to anyone, since they've been testing it for some time.
Forum discussion at WebmasterWorld.