I've thought about that many times when watching old sports videos, especially some motor racing and football which used to have very prominent cigarette advertising - thankfully illegal now here in Australia.
Often the ads are blurred which I actually don't like as it kind of ruins the feel of the show. I'm not a fan of such retroactive censorship, it feels historically dishonest. What is a film if not a recording of the zeitgeist? And within that zeitgeist, cigarette advertising was acceptable. I'm not sure if it's actually required legally as I could have sworn that I've seen some without the blurring.
Customisable TV ads is not an idea I'd be prepared to release onto the world. If there's one thing that humanity doesn't need, it's more advertising.
As an aside, I've seen multiple cases of live video-processing to replace or overlay advertisements on sporting events, such as those plastered on the walls of arenas. (Generally done during broadcasts of those events, as part of deals that separate the market for broadcast and in-person advertising at those events.) So, don't underestimate the ability to block advertisements given sufficient motivation.