Ad extensions in Google Adwords allow advertisers to include extra information in their ads like addresses, phone numbers, store ratings, or additional webpage links. There are several types of ad extensions including site link, location, call, review, app, and callout extensions. Ad extensions make ads more informative for users and can boost click-through rates, drawing more attention to ads. They are easy for advertisers to set up and can help improve ad rank in Google's new ranking formula.