Dynamic ads automatically show the right products to people who have expressed interest on your website, in your app or elsewhere on the Internet. However, in order to do that, previously you needed to choose "Product Catalog Sales" as your campaign objective.
You can now, instead of individually creating an ad for every item you promote, you create an ad template that automatically uses images and details from your catalog for items you'd like to advertise for the "Conversion" and "Traffic" campaign objectives as well.
After you choose Conversion or Traffic as your campaign objective, you can add your catalog by choosing "Product Ad Template" as "Creative Type" on the "Creative" step. Right after that, you simply add your "Catalog" and choose your "Product Set". The rest of the campaign creation process is just the same as the dynamic ad campaigns.