what I don't understand is how paying for YT ads can be profitable. I've never clicked on a YT ad _intentionally_ nor I know anyone who did, having asked a few people. I admit the brand awareness works tho.

There's a counterintuitive effect sometimes, which is that the person who tolerates a stupid ad is also more likely to buy the product. This was used by email spammers whose messages came littered with deliberate grammatical errors as an efficient filter against too-smart targets.

I don't know what the conversion rate for YT ads are, but I vaguely remember figures of ~0.1% being tossed around during the years when banner ads were dominant.

If that rate is still true, then it would be 1,000 sales per 1 million ad views. Someone earlier mentioned a crappy $60 fan they saw advertised on YT. If the company generates $60,000 for a $10,000-30,000 ad buy (assuming $0.01-0.03 per view cost), then that is worth the effort. Even a 0.05% conversion would be worth it if you kept your ad costs to $0.01

Profitable while still making your anecdote true. Only 500-1,000 clicks per 1 million views is almost "no one clicks."