Advertisers use placement targeting to display ads on specific sites and pages in the AdSense network. Placement-targeted ads reach users visiting specific sites, independent of their interests or demographics.
Personalized advertising (formerly known as interest-based advertising) on the other hand, reaches users based on their Google Account, the sites they've browsed and/or the interests and demographics associated with them. For example, an advertiser selling footballs could reach customers through both types of advertising. They could use placement-targeted advertising to display their ads on specific football-related sites, and personalized advertising to display ads to users in the sports interest category on sites without content specific to football.
