You can reset reset your Advertising Identifier on any iPhone, iPad or iPod Touch if you use iOS 6.1 or newer. This means you can basically throw all the anonymously gathered data about a device that is used to serve relevant ads out the window and start fresh, thereby removing any of the targeted data that has been accumulated and assigned to that Advertising ID.
You can also turn iOS ad tracking off completely.
All of the accumulated data is anonymous, there isn’t some universally important reason to reset the Ad ID and by no means should it be considered standard procedure. Because the data is anonymized, the reasons to reset the ID tend to be fairly unique situations:
Of course there are other reasons as well, but again it’s important to stress this isn’t some super important thing to think about for 99.5% of iOS users.
For some historical background, the Advertising Identifier is a relatively new creation, and previously advertisers tracked anonymous data by the actual device UDID. Because the UDID is tied to hardware and not possible to reset, Apple created the Advertising ID as an alternative to the UDID, one which can be freely reset and directly controlled by the user much like cookies and browser history can be managed at any time.