Microeconomics. Advertising Expenditure? Waste of Money?

Question

Advertising expenditure is a waste of money and serves no useful economic purpose.

is this true or false? and why? It's gotta be.. uh, false I think lol ..but I can't explain why..

Answer 1

I disagree that it's false.  Raising revenue (either through advertising or building a more efficient product, etc) is never a waste of money.  How can it be a waste if the return on investment is high and quantifiable?

Answer 2

You're right, it's false.

Advertising expenditure serves to increase the demand for a product, which will increase sales, thereby paying for the advertising and increasing revenue.

For a perfect real world example, looking at pharmaceutical marketing.  Huge advertisting budget, tremendous gain.