I selfhosted Invidious a while back, but gave up on it when it stopped working and I couldn't figure out why. I have no experience with Piped.
I settled on a third alternative, but I don't want to point too much attention to it because I think it might be flying under Youtubes' radar at the moment. But let me say this: if you embed a youtube video on a third party site and have it be part of a playlist with only the video in it, you won't see any ads. so for example I'd be embedding a link like this: https://www.youtube-nocookie.com/embed/dQw4w9WgXcQ?playlist=dQw4w9WgXcQ&vq=hd1080&autoplay=1&modestbranding=1&rel=0 on my own page and can then watch it without ads :) if you have any questions, feel free to hit me up.
EDIT: Well, I just got the first ad using this method. So it seems youtube is cracking down on all ad avoidance methods and they found this one too. Only one ad so far, so it doesn't seem to be as bad as their own site, with (sometimes multiple) ads before almost every video, but I'm sure it'll happen. Guess Piped/Invidious it is!