Dean
what you highlight is correct re the IP address being used to target you when they bother to find that out. Not all of them do. There are a couple of things you can do.
1. Use a browser that is designed for your privacy not their benefit. Brave is based on Google's engine but they tweak it to protect you not abuse you, load and use this for the more important stuff. By choosing to use this product you will be "better" protected by not leaving trails of cookies and other rubbish. This is a bit like using the enhanced (incognito) private setting on other browsers like Chrome and Safari. (menu-file-open private window or similar)
2. If you are using a Mac/iPad etc there is a feature built into Apple that disguises your IP if you have an Apple subscription. https://support.apple.com/en-gb/guide/iphone/iphb01fc3c85/ios#:~:text=Hide%20IP%20address%3A%20Safari%20automatically,IP%20address%20isn't%20hidden.
3. There are a ton of VPN tools that you can use to make your connection appear to be coming from another location. They do generally provide a significant improvement. Many of the sites get around this by placing cookies which are then used to track you making the VPN less valuable than a better browser. They also cost money but can help. The Apple tool does this in the O/S and is generally better if you use an Apple product.
4. In most cases the adverts are driven more by cookies than your IP. Your browser will let you shred cookies or install a cookies blocking add-on (browser privacy extensions) search for adblock as an example of this.
5. The IP address is assigned by your ISP (Sky, NTL, BT etc) and is used to identify your home router. You router runs a matching table on the home side which is used to share this connection around the devices in your house. It is probably going to be something like 192.168.1.X. inside your house. The VPN makes your device hop through other "nodes" so it appears you come out in a different place. It only works on the machine you run it on not all the others in the house.
You are always going to get ads, it is just how personal they are?