Well, yeah. Companies pay youtube to show you ads on their platform; this lets youtube stay free for users while still being an unbelievably expensive operation (not debating the ethics just - that’s how the funding works). As an alternative, youtube gives you the option of paying them directly to buy the space ads would normally have bid on, and then blank it out. They get a steady monthly revenue stream, even if it’s less than they’d be making by selling that ad space, and you get no ads.