It's not a question of IF the ads can be blocked. I know for a fact that they can. I disabled my browser based ad blocker to test Pi-hole. As soon as i re-enable it, ads get blocked. Besides, I also tried with a system-wide ad blocker (AdGuard) and it can block ads even in apps from the Windows Store. Additionally, I added entries in the host file from MoaAB (MoaAB: Mother of All AD-BLOCKING > BLOCKS ADware Malware Spyware Bloatware Ransomware | XDA Forums). Again, ads get blocked.
The biggest advantage of running Pi-hole and what sold me to it is that you can block ads on devices that don't support ad blocking, like smart TVs.