MS adcontrol - location targeting?

After much searching through MS docs and blogs, I'm still not clear if we are supposed to set the users location for ad targeting. The examples don't include calls to set the location, but the SDK refers to setting location via country code or GPS cordinates.

I can see it's value especially if more local ads are deployed for local shops / traders.

What happens if no location is set? Does the adcontrol use the users windows live account location?

Does anyone know the right policy?

 

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