Shrug I thought I made the case already.

If Google makes X on untargeted ads and X+Y on targeted ads then it comes out ahead by offering Y/10 of that money to the user somehow.

Yeah it's peanuts so you make it Google Play credit. For some people maybe it's only one song a month, for others it might be one movie a quarter.

Or Google could make a deal with Facebook: If Google makes X without Facebook's data and X+Y with their data, they can offer Facebook Y/3.

But Facebook is gunning for that X+Y. There are only 12 billion * 24 eyeball hours in each day.