My thinking is just that having so many services ads funded means that companies like Google and Meta will never ever show a company that their ad spending yielded no measurable result. If some of the larger buyers of ad space started pull back their spending, because it's generating results, multiple industries would just collapse.
I think we've reach the point where actual honest consumer products have peeked in terms of ad spend, and that's why we're seeing so many ads to garbage products and addictive online games. The "good" ads dried out long ago, and now we're more or less just scamming weak and addicted people.
I honestly don't think that ads are super ineffective right now, because companies are too greedy to not cut useless spending (I would expect that stopping ad spending would cost your average company significant market share, medium term).
But you might be right that the growth potential is pretty much exhausted.
If everyone stopped spending on ads the industry might be able to collapse, but I don't believe in that scenario because it would require collusion, and also reduce demand for the whole sector trying it (e.g. if all softdrink companies stopped advertising, I would expect total consumption to decrease as well).
Sure, there's performance marketing where you pay for clicks, but at least last time I checked, paying for "impressions" (how that's measured is up to Facebook et al) is far more common.
And a lot of advertising I can think of is just "brand building" anyway, trying to get something in front of as many eyeballs as possible without a directly measurable result such as an immediate purchase. Sure, folks try to measure the impact of that, but it's hard, to say the least. The goal is that next time you need a new car, whenever that is, you're more likely to get an Audi cause there were a few in Avengers. Same principle outside product placement.
Add to that the somewhat common practice of advertisers trying to steal each other's customers (it's pretty common to buy a competitor's name as keyword in search for example) and you've got a pretty well oiled self powering money making machine.
I think we've reach the point where actual honest consumer products have peeked in terms of ad spend, and that's why we're seeing so many ads to garbage products and addictive online games. The "good" ads dried out long ago, and now we're more or less just scamming weak and addicted people.