This article explains the difference between personalised and placement-targeted advertising within Google AdSense.
Placement-targeted advertising
Advertisers use placement targeting to show ads on specific sites and pages in the AdSense network.
Placement-targeted ads reach users visiting specific sites, independent of their interests or demographics.
Personalised advertising
Personalised advertising (formerly known as interest-based advertising) on the other hand, reaches users based on their Google Account, the sites that they've browsed and/or the interests and demographics associated with them.
Example
An advertiser selling footballs could reach customers by using both types of advertising. They could use placement-targeted advertising to show their ads on specific football-related sites, and personalised advertising to show ads to users in the sports interest category on sites without football-related content.
