We've had location based mobile advertising for at least a decade in Japan.
Early versions used cell tower triangulation and they weren't all that accurate. With GPS in all the phones now they're quite accurate, and it's made the service much more attractive IMHO.
The phones I've used have always had an option to easily switch these sorts of ads on or off. A lot of restaurants and bars have really taken to this medium. It's a great way to get coupons when you want them, and then I'd switch the service off.