Someone pays Google, gets your usage data (and can do with it whatever they want).
In selling targetted ads:
Someone pays Google and gives them a specification of what kind of people they'd like to see the ads, and Google uses the usage data they already have to select who to show the ad to.
At the end:
In the former case, Google and the third party both have your data.
In the latter case, Google has the data, and the third party does not.