I give Google a tonne of data, they know everything I search for, they know where I live and where I shop, they know how long I spend in a shop before buying something through android pay, et cetera. My targeted ads are still just junk.
Ads for websites I've visited because I've done work for them, products I've already bought, and stuff that seems completely unrelated seems to make up 99% of it. I guess the first category works as a "let's remind people the things they've used exist" in a coke kind of way, but why have Google been able to trick people into believing that this is 'effective targeted advertising'?
Because there was nothing before Google (or if there was it was even worse shit than what G was peddling).
And the game is still that. G doesn't have to do much, just beat/buy the next one.
And that's how FB got them, sort of blindsided them by that one trick, Sergei and Larry now hate them! You won't believe which one! Google lost the walled garden social network game. Users spend a lot of time with other users instead with content directly, so the network effect dominated.
Also, you're probably not the lowest common denominator, you're not the target audience for the usual ads.
The difference with targeted ads is only that users are more likely to click on them. It's driven the cost per click down, and made advertising dirt cheap.
In the old model of advertising, the gizmo maker put out an ad in a reputable publication, spending quite a bit of money to do so, and got a small number of high-quality leads. With targeted advertising, the gizmo maker blasts their ad out everywhere, and, for a small amount of money, gets a large number of medium-quality leads. Overall, I'd expect they'd get more sales with the targeted advertising, simply due to casting a wider net.
This is the idea that has powered online businesses in the last 10 years, but I'd argue that just because conceptually Google can know me better than NYTimes the raise in ad blockers has shown that the ad distribution ecosystem doesn't really know their users that well.
I must be living in a very different world from the one where "Google and Facebook ads are so effective" that no other strategy is possible.
As far as Google and Facebook pushing other advertising networks out of business, it's not that they're so effective that no other strategy is possible. It's more that they're effective enough, and so cheap that other networks can't compete.
Compare this to a popular car review site I use, which seems to manage their own ads. You know what ad I'm shown when reading a review for a car? A deal on purchasing or leasing that car. This is something I'm highly likely to be interested in _now_, and if the deal is good- there's a decent chance I'll click on the ad.
When I'm reading a magazine, ads are often not just NOT an annoyance, but are actually part of the experience, because they're advertising things that are really interesting to the target audience of the magazine. There is a very small handful of websites where I will even glance at the ads not by accident, and none of these are using Google's ad network...
Part of the problem is that Google and Facebook actually can know the audience better than the content creator. A content creator only knows that the reader is interested in, say, cooking. Facebook and Google know most everything the reader is interested in, and what sort of ads the reader actually interacts with. They can use all of that information to maximize the chance the reader will click on an ad.
The problem now is that because of how effective Google' and Facebook's ads are, a single click on an ad is basically worthless. Someone who's trying to sell a product isn't going to pay 100 times as much per click to use a smaller ad network, they're going to go with whoever can give them the most impact.