I know this breaks HNs brain so I don't expect to win this one however.
Can ads encourage people to buy stuff they don't need? Yes. Like most things (including humans), they aren't perfectly rational.
You know what else does this but in a non-creepy, non-tracking way that doesn't try to artificially create needs/wants in people? Accurate search results.
If I want something I can search for it and find it. SEO and advertising and sponsored results are the way companies try to skew search results (usually by making them less accurate and useful for the person searching) in a way that benefits them.
A bidding-based advertising system ultimately results in the most valuable solution winning, since the ad spend will be marginally bid up as close to the value the consumer is willing to pay for the product/service minus producer input costs.
The most successful companies ultimately have the most to spend on ads. Again, this does not result in perfectly rational outcomes all the time (because humans are irrational), but comes damn close.
Now, whether we should let one company take the profits off of that ad bidding system (since it inherently trends to monopoly) is another question.
For a more distilled scenario, if you manually accepted open stock trade offers, and your broker took kickbacks to always show you the worst bids/asks that they think you might fall for and make it difficult to find the best quotes, that would obviously be bad. In fact not providing best execution is illegal. The ad economy runs on exactly this conflict of interest. Money flowing through ads represents inflated transaction costs.
Now turn off your ad-blocker, look at the next ten ads you see on the internet, and count how many of them fall into that category.
hmmmm I am not sure what you mean here? wherever I consume the media I will be bombarded with ads (regardless of my blocking skills...) :)
Unfortunately, this is a clear clash of "line goes up" versus "corporate integrity".
In the print media days, there was somewhat of a code of conduct-- publishers generally didn't want to run outright fraudulent or misleading ads because it damaged the image of the publication itself.
I'm not sure that Google has proven itself capable of rising to the same standards.