In short: Advertising is very effective and worthwhile if you're the only one with a product in that space. As soon as others enter it just becomes an arms race backed by mountains of money with questionable results.
https://en.wikipedia.org/wiki/Prisoner%27s_dilemma#In_econom...
Why spend all the money on questionable results? At risk of coming off as glib, perks. I worked in a field tangential to advertising and all of the money is very useful for throwing parties, signaling success and status, being able to invite clients to large events thatyour advertising is involved with (think superbowl), etc.
For some reason HN at large prefers a more conspiracy leaning attitude toward advertising which you can see in the top comment right now: "Anyone with a credit card can start changing how people think and act." This perspective believes that advertising is like a brain ray that persuades people to do whatever they say - that targets have limited agency over their own thoughts. It's very appealing to assume everyone is a gullible sheep (except yourself, naturally) but that's not the reality behind advertising spending.