If they showed the perfect ad, advertisers would be willing to spend much per view. As an advertiser I might pay some low CPM to blast my ad with poor targeting

If they showed the perfect ad, advertisers would be willing to spend much per view. As an advertiser I might pay some low CPM to blast my ad with poor targeting, but if instead they only showed my ad to exactly the correct people who will click and buy it, I would pay up to my marginal revenue per sale