Just like photography, illustration is equally as important in advertising... yet somehow it does get overshadowed by photography.
There are a ton of different genres of illustration and more than photography there are different mediums (watercolor, pen and ink, oil, etc). I think sometimes the lack of illustration use can sometimes be attributed to the overuse of stock photography to illustrate comps. Comp artists and stock art is not used that much anymore in design and ads and even in the classroom.
I always thought that it seemed much easier to bring in an illustrator to convey the idea that's in the art director's head rather than spending days looking through stock photography to find an exact example (or even better three stock shots and spend time composing them in Photoshop).
In advertising the term illustration is used as a commercial term but I don't think it always correctly represents the group of artists. Sometimes clients gets nervous hearing illustration and think cartoonish or line drawings. Illustration is so much more than this. Were Cezanne, Miro, and Monet illustrators in their day? It only takes a little searching and looking through websites and portfolios to become inspired for the next project.