It’s a very rough indication of your chances (emphasis on very) based on your SATs. I would hope Harvard wouldn’t waste money on postage by sending mail to students with a 1500/2400 SATs, however, I started getting mail from some very good schools once I passed the 700 mark on my individual SAT 1 and SAT subject tests. UChicago spammed the crap out of me and BU sent me some mail and yet I got rejected from both probably because of some of my junior year grades. I also had mail from John’s Hopkins and Wake Forest and didn’t bother with either. I believe that because I did poorly on my PSATs (long story, probably should’ve canceled my score because of it) I previously barely had any mail from colleges.
It’s advertising. However, it’s not necessarily bad. I got familiar with a lot of great schools I had never heard of because of it.