Think of it like this. Google only knows exactly who you are when you're using your account to sign into one of their services. They know you're Subsonix while you're using Google Maps. If you use Google Maps to launch beyond their services, you no longer have a name attached to you. You're a nameless blip on a radar, with some demographic information attached to it. In other words, you're no longer Subsonix to them. They lost track of your name as soon as you walked out the doors. Now you're just a random grey dot, male, age twenty-something floating around a huge map. They don't know where Subsonix went, but they can track this male, age 20ish dot around to see what it visits, what it buys, and where it goes.
Google then uses this information to gather demographic information. Hundreds of thousands of other male, age 20ish dots tend to go to tech websites, and usually link off tech websites to certain other websites. That's some nice information to have. They can go to an advertiser and say "hey, we know about a group of people who'd love your product. Pay us a million billion trillion dollars, and we'll advertise your product to them". They do it, and since you're tagged as a male, age 20ish dot, you'll see that advertisement.
This is the part that concerns people, but it's all a bunch of hooplah and ado about nothing. They don't know you as Subsonix. That name is just a guy signed up to Google accounts to them. What they know you as is a generic, completely anonymous, and totally nondescript point who likes certain things.
It's like Google is a guy standing on top of a large building, looking down on a crowd of people wearing blue shirts or red shirts. Blue shirt people like pie. Red shirt people like cake. They're too far up to make out any faces, so all they can do is shout "HEY BLUE SHIRT PEOPLE! PIE HERE!".
It's about the most benign thing in the world. I mean sure, the possibilities and implications are kinda creepy. Knowing you're being tracked, even completely anonymously can give some people the jibblies. But the reality of it? It's pretty boring.