Is the cost of advertising an efficient allocation of scarce resources for companies?

The answer to this question boils down to a simple cost vs benefit comparison. If the cost of advertising is overshadowed by the additional profit brought in by the advertisements then the allocation of resources to advertising is an efficient use. However if the advertising choices cost more than they bring in, this is not an efficient allocation of resources.

If there are scarce resources, meaning that the company does not have a lot of extra money to spend on discretionary expenses, it would need to determine whether more advertising will generate more revenue. If they are already spending a significant amount on advertising but not getting sufficient new business, then increasing the advertising expense may not increase their revenues. In this case, they may need to find other methods to increase revenue (decreasing other costs which allows them to decrease price, for example).

If the reason that they are not getting enough revenue is that the market is unaware of their existence, then advertising may be the way to go if they have a product that the consumer has a demand for.