This is just DNS-level blocking; I'm pretty sure you can do this already if you have a Linux-based router that has a DNS server+resolver built in (i.e. most of them), but if you have an RPi lying around doing nothing, might as well put it to use.

Note that this doesn't block ads which are inlined and/or otherwise combined with content; for that, you can use a MITM proxy like Privoxy.