> demographically target their audience

That depends, some platforms already have their demographics skews so that might be indicative

> pay-per-click

Most platforms even tracked conversions with their pixels, but that will become a no-no as we're nearing the death of the 3rd party cookies. Companies will most probably start relying on Market Mix Models that model the impact of investment into ads on different channels on Revenue also taking into account things such as effect lags etc. Facebook has recently introduced an open source solution for this. I work for a company that also provides their own solution as a part of our platform and the interest is definitely picking up, so this issue might become less of an issue due to how the overall advertising ecosystem evolves in the next few years.

Advertisers will use third-party analytic services that profile channels audience (but not individual users).

I'm curious if there will there be a possibility that targeted ads may be regulated, especially if alternative models like this and DDG's approach are successful enough.

Well, there’s still a way to target topics & languages, as well as specific channels.