The auction process only solves that problem if advertisers know what the adjacent content is and use that information to bid less or not bid on it. At that point, we're back to the status quo of advertisers policing content.
While you might be able to automate the process somewhat with ads that aim for direct conversions, it's still extremely difficult to automatically measure the effectiveness of brand advertising.
That part of it is easy to mitigate by the auction process. I.e., the mean efficacy of ad placement is reflected in the price of the winning bid due to the usual market forces.
The less quantifiable part of it, "my brand must never appear alongside X," cannot be dealt with in the auction because the recall has to be perfect and it's not feasible to guess how the advertiser would decide all the tricky cases.