We have placed ads through an ad network targeted to our state's geo. We have doublechecked that the placment is correct, but our Google Analytics shows significant traffic from these UTM's coming from out of state. When we drill down the traffic seems to be coming from hubs for Amazon Web Services, Level3 or other web hosts. Does anyone have an explanation?
This sounds line someone might be crawling or tracking your site. I doubt it is the Googlebot or Adbot as these crawl from Google owned IP addresses and are identifiable as belonging to Google but that doesn't mean that other crawlers aren't crawling your site based on these ads as when they crawl a site that is showing your ads then they will have a link to crawl your site from the ad link and that will include the UTM's you added to the code.
If it is a significant amount of traffic you can try blocking the IP's in question from browsing your site but if the amount of traffic it is generating does not bother you then you probably don't need to worry about it.