This is only if you assume that a market saturated by advertisement is (properly) "functioning". While advertisers like to claim that they are merely improving

This is only if you assume that a market saturated by advertisement is (properly) "functioning". While advertisers like to claim that they are merely improving distribution of information (bringing us closer to that mythical "perfect information" assumption about competitive markets), in practice they mostly do the opposite. That is, taking advantage of cognitive biases to sell people things they don't need, increasing net market participant irrationality.