Actually advertising works best when it exploits the needs and desires you already feel. The farther away it gets from those, the more expensive it gets. That said, ever since the sixties it does sell things based on people's need to project their status and image, as a way of defining oneself to the outside world. People buy things for what the thing does, plus what owning and using the thing says about your personality. And people seem to be prone to accept these symbolic identifications less critically then they do performance claims about what the product does. Bob Dylan said it best:
Advertising signs that con you\
Into thinking you're the one\
That can do what's never been done\
That can win what's never been won\
Meantime life outside goes on
All around you
But umm, I don't think it's always a bad thing. Or rather, it's not bad by default.