Earlier this month Google introduced Local Listing Ads which allowed local businesses to pay for their local listings to be included in the Sponsored Results.
The results? The ads appear in search results very sporadically, much like a poorly managed Pay Per Click campaign, and don't always show up for all the keywords relating to the business' offerings. The targeting is based on the existing local business listing, and the ad is preset with the same content found in the existing ad.
Google clearly has some tweaking to do, but either way it still looks like local search marketing is still the best way to go. Check back for updates from the SMT marketing team on the results of Google Local Listing Ads' trial run.