I'm skeptical of the "driving by the pizza place" examples. Physical proximity to the pizza place usually doesn't imply any intention to consume pizza. There has to be a stronger signal. I'm physically close to a pizza parlor and I just searched for "dinner and beer" would be enough to assume I have some intention of consuming pizza hence advertising the pizza parlor at that moment is valuable to both myself and the business.

Advertising based entirely on physical proximity could be almost useless. Imagine driving through downtown at 11 PM on a Friday night. As you pass the dentist you're prompted with "50% off your next teeth cleaning!". As you pass the park you're prompted with "Sunday Parade at the Park!". As you pass the liquor store you're prompted with "Beer sale!". Finally something useful. However by this point I would probably be ignoring the ads.