Bing (and yes, Yahoo!) search advertisers are now able to target advertising to appear when consumers search around a specific geographic location - up to a 100 mile radius.
Bing expects radius targeting (which enables advertisers to create local ads around an address, the center of a zip code or a lat/long coordinate) to increase relevancy for users - and it's easy to see how. It will likely have some positive effects for campaign efficiency and ROI as well.
Expect savvy advertisers to jump on board in droves. Bing provided a few examples of how the feature might be used, from "encircling the competition" to "driving shopper loyalty" and repeat visits.