Has the cost of advertising and marketing displaced more productive use of capital and limited the capacity and drive to create new products and technologies?

Investing in advertising and marketing can be fruitful for the company as it will yield profits for the company and can be beneficiary for long term due to economies of scale.

Advantages of investing in advertising and marketing are:

Introduce the product: When a product is produced, it is important to make the consumer aware of it. In order to make them buy the product advertisement plays a vital role to increase the sales of the firm. So, it is important to advertise the product.

Research: Knowing the demands of the consumers are important before producing. Therefore, marketing research is done to know what type of product a consumer need and technologies to be used while producing them.

Long term profits: Investing in technologies may give an individual short term profits but investing in advertising and marketing can give long term profits. Advertising can be shown again and again to induce the consumer to buy the product even when a consumer doesn't want it. Advertising creates a brand image which influences the customers to buy from that particular brand. It provides the firm benefits from brand loyalty.

Therefore, through advertisement the firm gets the incentive to innovate and efficiently utilise its capital.