When you use regional targeting in your campaigns, Google users searching from your targeted areas will see the city or region name (whichever is more specific) displayed directly beneath your ad. This alerts users that your product or service may be especially relevant to them due to your proximity, and it helps you reach local users. Check out this example ad:
We show the name of the region or city based on the actual search query or the Internet Protocol (IP) address of the user, if available. Learn more about how AdWords knows where to show your keyword-targeted ads.
With regional targeting, it isn't possible to prevent locations from appearing underneath your ad. Visit the Targeting by Location section of our help center to learn more about targeting your campaigns.
Update: Revised content to provide clarity on regional targeting.
Update: Revised content to provide clarity on regional targeting.