buckworks - 3:54 pm on May 29, 2010 (gmt 0)
I can share some perspective from the advertiser's side.
I manage an account that has had about 63 million impressions on the content network since March 1, and about 1.7 million of those impressions were shown to "audiences".
The audience-targeted ads are a bit under 3% of the total exposure, but they've contributed significantly more than 3% of the account's productivity. We bid twice as much for those clicks as the overall account average, and the effective CPM is strong.
However, at least in our case, Google still tends to favor the traditional keyword / theme based banner impressions the majority of the time. They're showing audience-based ads sparingly and are definitely not throwing regular contextual ads out the window.
Audience targeting has been icing on the cake for us, not a major change in our account.