There is some confusion around how Geo-Targeting of PPC ad's works in Google. So we asked Google to explain the situation for us in relation to one of the campaigns we are running in Poland at the moment:

Our Question:We want to target Polish people who are physically in the UK, who are entering Polish keywords into Google.pl or Google.co.uk.So we can currently target people based in the UK searching in Polish in Google.co.uk, but as far as we're aware, the ads won't appear in Google.pl unless we select Poland as a geo-targeting option.Is this true?Google's Response:I understand you are enquiring about targeting Polish people who are physically in the UK, using the Polish language.You currently target people based in the UK searching in Polish via Google.co.uk.Unfortunately to target individuals that are physically in the UK but choose to use www.google.pl you would need to target the country of Poland because when an international user uses a foreign domain they simulate being physically in that country.In summary with AdWords, you can target your ads to countries or territories, or to specific regions and cities. When someone enters your keyword on Google, the AdWords system uses several factors to determine whether to show your ad:1. We consider the Google domain being used (.pl, .co.uk etc). If a user visits www.google.pl, the Google domain for Poland, she'll see ads targeted to Poland, regardless of her current location.2. We analyze the actual search term the user submits on Google to determine when to show ads targeted to a specific region or city. If someone enters a search query that contains a recognizable city or region, we may show appropriate regional or custom-targeted ads. For example, if someone searches for 'Polish Newspaper' we may show relevant ads targeted to Poland, regardless of the user's physical location.3. When possible, we determine the user's general physical location based upon their computer's Internet Protocol (IP) address. An IP address is a unique number assigned by Internet Service Providers (ISPs) to each computer connected to the Internet.Any ads shown on Google.com: While country-specific Google domains (such as Google.fr) don't use IP address to target ads, Google.com does. For example, if a user with an UK IP address visits Google.com, we'll display ads targeted to UK, even though the user isn't accessing Google.co.uk.Additionally, a user's language setting will determine which ads they can see. The 'Preferences' link on the Google homepage lets users choose the language in which they want to search. When the user sets the language preference, Google only displays ads that are targeted to the chosen language. For example, users who choose Polish as their language preference see ads targeted to Polish speakers.Therefore just as you suspected, unfortunately the ads won’t appear in Google.pl unless you select Poland under geo-targeting.___________________We hope that explains it for everyone...the interesting part for us was to see how Google.com reacts differently in regards to geo-targeting than other Google domains such as google.co.uk and google.pl.A tip from the Stellar Search Team