This feels like a cheap take. Consider any number of small businesses just starting out (a local juice bar, a fitness service, a mobile app, a game...). They have a good product that makes their customers happy. The problem is they only have 5 customers and that won't pay the bills. They could hope that they just get lucky and people just discover them (it happens but its rare), or they can go out and promote their product. So they invest in marketing and sometimes this means buying ads. Can this business exist without targeted ads? Of course it can, but the odds are stacked against them. Saying they can't exist is an exaggeration.
