If the difference in effectiveness is enough to make Google, etc unprofitable than maybe there is an argument to be made that it is necessary.
If it means they make 10% less profit, people would probably prefer privacy."
Possibly in aggregate, but they almost certainly have an effect for individual advertisers. No company is going to cut their advertising if their competitors aren't going to make the same cuts.
But it would be very cool.
Imagine if all browsers suddenly shipped perfect ad blockers[1]. Many sites would die off; but I suspect a number of micropayment platforms would quickly spring up in their place. The result might not be as diverse, but it would be interesting.
[1] A perfect ad blocker would have to do the impossible, i.e. identify sponsor segments of YouTube clips, slice out native advertising, and somehow kill off all promotional consideration. I.e. absolutely impossible and probably not desirable.
But we don't know how much online advertising lowers prices. Would be interesting for an economist to study.
For all we know, online ads could have no effect. And what about ads intended to generate demand instead of address current demand? Maybe online ads are tricking us to by more of what we don't want (Yay, another subscription box).