I'm skeptical.
So what does geo-targeting achieve above fancy slides and recommendations? A lot, as it turns out. While geo-targeting might not be as advanced as it is in the States, we still have a measure of certainty around an area (which admittedly has to be much larger) and the creative that you can apply to that specific area is highly targeted and relevant for the audience.
How do you determine relevance and targeting? Firstly, look at your location. Are you targeting a village next to a large city? It's not going to work properly - their IP addresses (like mine), are usually going to locate in the city, rather than in the village. Use a 3-5 mile rule - don't expect campaigns to properly geo-target in less than a 3 mile radius. Be realistic about your expectations for British geo-targeting; it's not an exact science. The beautiful city of St Albans is well within the commuter belt for London, but far enough outside the main motorways (M25, M1, A1(M)) to be geo-targetable:
You need to play around with radius targets in your custom settings within AdWords to get the right mix of city and outskirts and ensure inclusiveness for your campaign. What if the city isn't as easy as a circle? Remember fifteen years ago, when you got your first desktop computer and you could choose from Solitaire or Paint? Brush up (pun absolutely not intended) on your MS Paint skills and draw border points around your target area:
Nothing against Chiswell Green, but it could be that you've chosen to exclude them from your geo-targeting for retail delivery or competition purposes. It's relatively simple to draw map points around larger areas, and for the geocaching fanciers among you, you can even specify exact latitude and longitude points (but remember the <3 mile accuracy issue).
Putting a black hat on for a very small moment, geo-targeting can also be used to exclude certain areas (and certain competitors' eyes) from seeing your ads. It's not entirely ethical, but it certainly can work. It stops working when your competitors or affiliate managers know what the Ad Targeting Preview Tool in Google is and use it. There, I ruined your fun.
When you set realistic expectations for geo-targeting in the UK, you can achieve some pretty heartening results - not least of which an increased click through rate and lower cost per click.
Happy geocaching.