Is old-style advertising even an option?

There's an interesting quote of the founder of GeekSquad  here that more or less defines advertising as a tax paid by companies whose products are unremarkable. This is perhaps the shortest assessment of the true nature of a practice that needs to be reshaped in a major way.
With the web becoming a truly interactive space and consumers taking more initiative (and control) how can a product owner even beging to think that investing in advertising is a more profitable proposition that investing in design and in customer experience?
In this blog, the author discusses this "death" sentence pronounced against old-style advertising and highlights something my friends and BuzzParadise believe and keep repeating to their customers and to audiences they train: if the product ain't good, there is no point trying to push whether one does so using old-style advertising and promotion or with a marketing approach that does not rely on advertising but instead builds on successful customer experience and word-of-mouth.
A product that delivers good customer experience is the minimal bsaeline below which the cost of the tax is extremely high and no return will ever come out of it. So really investing in proper product design really seems to be a no-brainer!