There's some [literal] marketing 101 stuff most people aren't aware of. For large companies the value in marketing isn't really about directly selling you products, but about instilling a positive subconscious perception of a product in your mind.
Coke is the classic example. Dominant marketshare, defacto monopoly in many regions, and a loyal customer base. Yet they advertise endlessly and at great cost. The reason is so when you look at a bottle of Coke you don't think 'sugar, heart disease, obese people drink this' but instead 'crisp, cool, refreshing, athletic people drink this'. And it's all subconscious because of course we all consciously know its the former rather than the latter, but advertising can effectively make people do and think things that they might not otherwise. And there is significant research and practice to confirm all of this. Companies aren't just spending out of inertia.
This [1] is considered one of the most effective and powerful ads of all-time. It's Apple's 1984 Ad about the first Mac. A 60 second clip with zero information on the product/capabilities, zero information on pricing, etc. And Apple spent big on the ad (which was, for instance, directed by Ridley Scott) and tried to get it out everywhere, including in theaters. It seems like a completely absurd ad, until you understand how advertising works.
That's partly why since we've got better measurement tech in the digital ads space we've seen a massive shift to performance marketing and solid, measurable results.
I recently read "Subprime Attention Crisis" by Tim Hwang and he believes that even the performance marketing space could suffer a decline too - but he could be overly pessimistic in that regard.
However, that is also the exact type of adtech that is extremely dodgy in terms of privacy, because it thirsts for data. I'd love the whole thing to end in favor of some genuine user recommendation system. But as always, any ranking system that drives revenue will be gamed to no end.
My general sense is that paid ads is still valuable for niche markets as the ad will be cheaper and ad platforms allow quite specific targeting (they do gather huge amounts of data after all). It's probs too expensive for big competitive markets.
As an aside, it's quite risky to rely too much of paid ads as your business becomes subordinate to the whims of Google, Facebook etc.
Turns out with barely any knowledge in the area the ads more or less brought in the money they needed to break even.