To recap, an interest-based ad is one that's based on the personal information that the advertising network (usually Google) has collected on you. Some people dislike being tracked and targeted for advertising purposes. There might also be times when these ads could cause distress or embarrassment (seeing an ad about a medical condition that you'd rather keep to yourself, for example). That's why you have the opportunity to opt out.
If you're an AdSense publisher, you can also opt out of displaying these ads on your own pages. To do so, log onto AdSense in the usual way. Click Allow & Block Ads, then Advanced Settings. On the resulting page, clear the checkbox labeled "Interest-based Ads Preference" (see screen shot).
That's all there is to it. It might take a few hours for the setting to take effect. Once it does, your site will no longer show ads based on your visitors' personal information.
Think carefully
But think carefully before you do this. By opting out of interest-based ads, you are reducing the total number of ads that will compete for a place on your site. That in turn is likely to reduce your AdSense earnings. You've got to weigh that risk against any possible ill will from visitors who dislike seeing targeted ads, and who might (incorrectly) blame your site for showing them.
Whether or not you decide to opt out, there are a couple of other choices you can make from the Advanced Settings page. You can disallow third-party advertising networks from using their own data to target their ads. The pros and cons of this choice are similar to those for the main opt-out setting. And you can prevent advertisers from showing Google +1 buttons on their ads. This will determine whether visitors might see ads that their social connections have +1'd. Not many advertisers show these buttons, and not many visitors use them, so this setting is unlikely to have a big impact either way.
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