Google is testing the inclusion of favicons in AdWords adsBarry Schwartz at Search Engine Roundtable has the following screenshot:  "Those icons seem to be from the favicon.ico file on those respective sites.

For example, eBay's is at ebay.com/favicon.ico," says Schwartz At this point, it sounds like Google's only testing this in EuropePerhaps the feature will make its way overseas in the near future I'd be interested to learn about the results from this testing.

For example, do they convert better (apparently ads with Google Checkout icons do)? Either way, it would give advertisers a little extra branding power from their PPC ads without going full-on display ad.

It's not a bad idea I can see the larger brands getting higher conversion rates with favicon adsUsers' attention may be attracted by the brand recognition they are not used to seeing in the AdWords ads they are being served.