This isn't search, but it is local. ShopLocal has partnered with news aggregator Topix.net to offer dynamic banner ads that are targeted by ZIP. The program services national advertisers trying to drive consumers into their local stores. An example dynamic skyscraper ad is visible here.
ShopLocal is providing the ad content and Topix provides the local news pages on which the ads appear. Here's the press release. Read a somewhat longer post on my blog.
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