There is no grand conspiracy, the ad industry is massive, and advertising works. Companies would find out pretty quickly that advertising is a waste of money, yet here we are decades later and they still ad spend like crazy.
It definitely works, and the more tailored the ads, the better they work.
The key is remembering we are talking about average people, not nerdy techno anarchists with router level ad blocking and a pavolonian vomit reflex to seeing the word "sponsored".