alt Hacker NewsIt isn't that simple. Each company paying for ads would have preferred that their competitors had not advertised, then spend a lot less on ads... for the same value.
It is like an arms race. Everyone would have been better off if people just never went to war, but....
There's a tiny slice of companies deal with advertising like this. Say, Coke vs Pepsi, where everyone already knows both brands and they push a highly similar product.
A lot of advertising is telling people about some product or service they didn't even know existed though. There may not even be a competitor to blame for an advertising arms race.