Although I agree with all of these points, I think relevancy is key. If it's determined by some means that I like "Antique Butter Churns", I'm hardly going to field like the ad to the "Antique Butter Churn Store!" website is actually an ad. I'd consider it a helpful recommendation.

If an ad platform could approach a point of such relevancy that users wouldn't see the ads as advertisements but friendly suggestions, that company would change the way the web works!