Earlier quoted context omitted.
True, you can't separate ads vs sponsored content quite easily. but you can help this by banning all forms of active tracking. Static ads only, no click tracking, and complete ban on profiling clients and especially on adjusting prices based on client/possible client behavior patterns.
Magazines made it work for decades. Websites can too. If you know the kind of articles your readers like, you can find ads that your readers will like.
It's amusing that after all this time and (hundreds of?) billions of dollars invested in adtech I still find the adverts in old magazines far more relevant and compelling than any of the "personalised" adverts of today. The industry as a whole has missed the forest for the trees by over-fitting their systems; I might be interested in the broader category, or a tangentially related one, but at no point do I want to see the exact same product I was looking at a day ago on every ad. I didn't buy it then for a reason, so I'm not buying it now.
Pervasive surveillance to make a system that's practically worse than the alternative that doesn't require mass surveillance, and is much simpler and cheaper. Did I say amusing before? Depressing is probably a better fit.