When you create an Announcement, it will give you an option to restrict the audience of the Announcement to a certain location.
If you find this location filter missing, it's possible that the location data itself is not present in the source where the people data is pulling from. You can confirm whether this is the case by checking if the location filter is present in the Directory -> People.
If it is not present here, location information isn't available and it is expected not to show as an option when selecting the Audience.