My biggest problem is quite simply that ads I see are never relevant. Hulu ads are dreadful - it is almost as if they deliberately tried to find the least relevant ads. Normal web site ads are just not remotely right for me. I would have no problem with ads being tailored for me by using additional information but every time I opt in to that kind of profiling it doesn't seem to make any difference.
The quality of targeting differs greatly depending on
a) the technology used
b) how much exposure you have to technology that can capture your interests (or your socio-demographic profile etc.)
If you use Gmail you will find that their ads are usually quite a good match for your interests, because the amount of exposure with Google is huge for the average user, and because they can use semantic contextualization on your mails...
Gmail is not my primary email, and I access Gmail via IMAP only. In any event I don't think what they see would be that useful. My Google Reader usage is more closely aligned with my interests, but I rarely star anything so they won't know the difference between feeds/articles that are genuinely interesting to me, and those that I use just to ensure I am up to date.
The manufacturer of my car has never displayed an ad trying to get me to take it in for a service, or sing the merits of the newest model that hits home for an existing owner. The various credit related ads seem to think I don't know money is fungible, or that I can't count. The various health and beauty products are extremely misguided. The food related ads are beyond stupid. The cell related ones assume that ETFs don't exist. I can go on, and on ....
