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 Don't they actually hurt the people who buy ads while giving more money to Google? 
 Advertisers will quickly move elsewhere if they're not getting the sales from online advertising. In order to combat this, the advertising platform (e.g. Google) will spend more time and money trying to sort out when they should or shouldn't charge their advertisers for a click.

It basicially increases the costs for both the advertisers and the advertising platform. 
 You are crazy. I have a small business and there is literally no other way to advertise my services except for Google Ads. And if I left they wouldn't even notice. 
 Would you keep paying for Google Ads if they didn't deliver any sales? If so, would you keep paying them as much or more than you are now?

I don't think it's such a crazy idea that people would find (or create) alternative if the vaule was not there.

It doesn't really matter, as it's unlikely that any ad blocker is going to become so widespread that it takes down Google's entire business model, especially when they control the majoritiy of the people's web browsers... 
 I've seen google ads work like magic in a couple of businesses I've worlked for. The return on the investment was totally worth it. Having a google ads budget and team working on it is a no brainer. If we kill google ads and don't provide something extremely effective right away many businesses would suffer.