Geotargetting of AdWords

Google has been using geotargetting technology for awhile now, but today I noticed that the AdWords ads being displayed when you search Google, will sometimes have an extra line that shows the city and state (or sometimes just the state). A search of western union shows the following for me (notice the last line on the ad since I'm in California):

Also, a generic search of web deisgn yields the following ads.

Blah, blah about it over here.