It says in-content advertisement. Like the famous Squarespace advertisement. YouTube premium doesn't skip the in-content ads which content creator put in the videos.
so I can watch youtube on my ipad without ads every 3 minutes driving me crazy. It was either get premium or give up on youtube, or maybe the ipad.
I was already using google music, and then youtube music family (which sort of sucks at least in terms of app development), so this was more an incremental add-on.
Not the person you're asking, but I am a Premium subscriber. In the niche I mostly watch (classical music performances) in-video ads are still quite rare--thank goodness!. So the Premium sub is still a benefit, esp. b/c before I subscribed, ads would suddenly run in the middle of a concert, which was incredibly annoying.