Which of these statements is true?
Location extensions appear when someone who’s physically near the business searches on relevant terms
Location targeting determines which business address appears in an extension
Location targeting enables location extensions
Location extensions appear when an advertiser targets a geographic location
This can be understood with an example. Let’s suppose, Zain owns a doughnut shop in Portland, and wants to draw foot traffic to his storefront. He adds a location extension to his ad. Now, people strolling around nearby who search for one of his keywords (like “best doughnut” or “doughnut shop”) can see his address, a clickable “Call” button, and directions to his shop making it easier for potential customers to find him.
Read more here: https://support.google.com/adwords/answer/2404182?hl=en