It has been reported that Google is testing ads on Google Mobile in the U.S., U.K. and in Germany. The company began testing in Japan
earlier this year. These ads, like the AdWords Ads are priced on basis of auction. "As with standard text ads, each advertiser determines
the cost of their own mobile ad campaign."
The help section of Google Mobile Ads explains, what the ads look like- "Mobile ads contain two lines of text, with a limit of 12 or 18 characters per line, depending on the language in which you write your ad. Your destination URL appears on a third line if you choose to enter one. If you select the option that allows customers to directly connect to your business phone, a call link will appear next to your destination URL."
For more information on the subject read AdWords FAQ section.