Form Extensions allow advertisers to place a field and button on their search ads, in order to direct users to a new, more relevant landing page based on a URL parameter. Form extension is still in beta version and if you want to set up to your account you need to talk to Google rep and ask if they can get you in the beta. There is a list of items Google needs from you to set this up.
You will be able to see ad with form extension as shown below:-
Below is the ad format when your ad will be shown on Top or bottom of Google Search
Below is the ad format when your ad will be shown on Right Side of Google Search
Form Extensions main use in many ways :-
1) Zip Code :- it will pass the zip code information to the url and direct it to the more relevant landing page.
2) On-Site Search :- it will search for the query that user has entered and will redirect you to the search result page of the website. This could be a powerful extension for retailers advertising on category keywords.
3) Query Refinement :- Refine broad / generic queries by capturing : Destination, departure airport code for Travel / Product type for Retail / City / region for Real estate / job classifieds and much more.
Benefit of using Form Extension
1) More appealing ads and it will also help advertisers in increase in Click Through Rate (CTR)
2) Shorter conversion path as using form extension feature there will be increase in conversion rate as people will not have to navigate the website the find the desired result that they are looking for.