Well, that's not news
Lots of people have patented the obvious in the US.
But for the record, we can trace the idea of location-based advertising back at least to 2001.
Here's one paper from Helsinki University of Technology:
"Location-aware services are "push" services where the user’s position or proximity to another object triggers some event or defines some condition. One example of location-aware services is location-based marketing, where for example advertisement is send to the terminals approaching the restaurant."
Note that this was published in conference, so is public domain.
I'm sure that anyone with an interest can just use this paper as a starting point to dig out a whole host of published papers on the topic (just search for the paper title or authors and check where it is cited).
The key points of the patent (in short):
"the method comprising: a) accepting geolocation information associated with the request; b) comparing, the accepted geolocation with geolocation targeting information associated with the ad; c) determining the relevancy of the ad; d) controlling the serving of the ad using the determined relevancy of the ad; e) determining whether the ad has geolocation price corresponding to the geolocation; and f) if the ad has geolocation price information, determining a score using at least the geolocation price information, otherwise determining the score using at least general price information of the ad."
Everything from a to d is obvious location-based-services. The only inventive step I could imagine here is using the price info (how much is paid to Google) to select the ad, but that is a stretch. If you do not use price as a criteria e.g. use the priority assigned by the advertisers to a geographic area, the patent does not affect your solution. (The fact that you have 100000 priority levels and you may or may not charge the advertiser by priority is irrelevant).