With location based advertising, a person inside a specific toy store during the holiday season could receive ads from that store offering a great deal. The location based advertising will mesh with Twitter's keyword targeted advertising that looks for certain words and phrases inside a tweet to determine which ads should be sent to a specific user. Everyone wins. The Twitter user saves money buying on a product that is relevant to him/her, the store gets the potential to ring up more sales, and Twitter gets more advertising dollars.
Location based advertising is not something new. Facebook has used zip codes to target ads since 2011.
source: AdAge via SlashGear