It can filter out DNS requests in the whole network for ads/tracker domains if used as the DNS resolver on your network, which would also include other devices (e.g. phones). Most smartphone apps perform a lot of tracker requests, which makes this approach very effective IMHO.

What the network approach doesn't help with is when the ads are served from the same domain as the content. An extension like uBlock Origin solves this problem because it filters the content within the browser.

So I think both approaches are necessary to filter out ads/trackers, and they also complement each other, one at the network level (dnsmasq or Pi-Hole) and the other at the browser/content level (uBlock Origin, PrivacyBadger).