[rapnie]

Yes. And isn't it also the case that, by offering their very elaborate targeting capabilities to advertisers, they still leak your personal data to 3rd parties, though indirectly? After all, the fact that a certain personalized ad appears in your page confirms to the advertiser that you are in their carefully crafted target group.

[skj]

(I work for Google, but not on ads and I have no social knowledge)

I think that one thing Google tries to do is to make identifyingly small demographics not possible. As you say, that would leak personal info when the user clicked.

[icebraining]

confirms to the advertiser

How would the advertiser know? Google is the one serving the ad.

[ehnto]

Tracking referals. It's a key part of ecommerce advertising metrics to keep track of who came from what campaign.