An advertisement is what you see on TV or posters you see outside for products and services. They are physical things. Advertising is a term used to describe the activities surrounding creating these advertisements.

Advertising is the process that you use to increase the awareness of a product. Advertisement is something that you can see or touch that makes you want to buy a product. You cannot use them in the same way.

Advertisement: (noun) a notice, paid announcement, poster, etc. that is used to promote a product, service or event. This can be seen in newspapers, magazines or signs. Ex. They're paying the website to display their advertisements. Advertising: (noun) an activity or business of promoting things on television, in magazines, etc. Ex. We're planning to get more customers by advertising.