Some seriously over-engineered solutions being offered in this thread, which I guess is understandable considering the cohort. And I'm glad that people smarter than me are looking at this from every angle. But here are the things that I know/feel to be true:
1) Back when advertising subsidised content was a straight up proposition nobody really minded about ads outside of finding them mildly annoying. It's how the most popular pre-internet content (privately owned free to air TV and newspapers/magazines) survived and flourished.
2) What most irks people about the current ad-tech based business model isn't the advertising, it's the data mining behind it.
3) Lots of people don't even care about data mining as long as they get what they need instantly, easily and for free.
4) The big ad-tech players' emergence and dominance after the bursting of the early 2000s dotcom bubble is widely attributed to their mastery of ad-tech whereas it seems to be that consolidation and concentration were much larger factors.
5) Ad-tech enabled targeted advertising isn't that much more effective than traditional- or content-based advertising (I wish I had the source for this but it seemed legit when I read it... Surveillance Capitalism, maybe?)
What feeds the ad-tech industry really is advertisers' FOMO on the algorithms touted by the ad-tech vendors. "Why buy a traditional mass-spray ad when you can have one delivered with surgical precision?" goes the sales pitch. And considering the old saw about 50% of advertising being useless but nobody knows which 50% it is, having numbers and measurable insights dangled in front of you must be compelling.
My suggestion is that we try to steer things back to content-based advertising. Of course the web needs to make money. Money is a great incentive for innovation, etc. Of course users aren't going to pay for it except in exceptional circumstances. We've been spoiled with too much free content to turn that ship around now. But if I'm on a site about skiing for example and I see an ad for a ski store that has a sale, that's a good and useful piece of advertising. I'm happy to see that, as long as it doesn't follow me around the web for the next 6 months.
And how do we steer companies to do the right thing? The only way that has proven to be effective over the years - by naming and shaming, boycotting the bad actors and supporting the good ones. Basically making the costs of behaving badly outweigh the benefits.
How do we get there? I haven't figured that bit out yet. The big problem is that it's kind of axiomatic that the likelihood of change is inversely proportional to the amount of money being generated by the status quo, and hundreds of billions of dollars is a lot of weight to throw behind keeping the current system humming along as is.