They have some interesting interviews with college admissions staff and information about Vanderbilt specifically using this tactic to decrease their admit rate (which makes them look better in ratings).
This certainly isn't the only thing driving the massive increase in applications. There are far more students taking the PSATs, more students sending out far more applications (out of paranoia? Pressure?), and more foreign applicants.
To some extent, I think it's a positive feedback loop that doesn't require advertising at all to drive it. If you know the admit rate is low (because of all the applications being sent), then it's in your best interest to send out lots of applications -- throwing spaghetti at the wall. Then the admit rate gets lower...
Personally, I'm not entirely against this trend. Growing up in a rural area with parents who didn't go to college, I had no idea what was out there. I figured I'd probably go to the state university (which was a good school!), but didn't think much about it. When I started getting mail from colleges, it was a huge help and broadened my horizons. I ended up going to a field-specific college across the country, and really loved it.
Not only that, but it was exciting and inspiring that these colleges I had only heard about in movies and books were reaching out to me. I just never thought that would happen. I'm sure I'm not the only kid from middle-of-nowhere West coast who was really inspired by that.