Yes and no. Without a users video history (& other tracking turned off) best they can do is push random ads hoping it would hit one in a million. That is not effective and sometimes even diseffective (hitting a controversially opposite target). Tha harms YouTube on both ends more than the ad’s company
By pushing users to turn it on they apparently gain more than just pushing random horse crap.
There's not really much evidence that targeted ads work any better than random ads. Plus they already have a point of data to serve ads: what video the user is watching.