Amazon Budget Allocation: How Strategic Spend Drives Performance

Every brand selling on Amazon must address the same key question: how should advertising spend be allocated? The solution usually requires more than just increasing or decreasing the budget. Instead, the greatest effect comes from carefully structuring budgets across different campaign types, defined goals, and the various stages of the customer journey.

Start With Business Goals

Advertising on Amazon serves diverse purposes, such as driving profit, accelerating growth, launching new products, or building brand awareness. Achieving each goal demands a distinct balance in strategy. For instance, a brand that prioritises profitability will rely heavily on established SKUs that offer strong margins. Conversely, a brand seeking to dominate a specific category might willingly accept a higher Advertising Cost of Sale (ACoS) in return for increased market visibility. Crucially, it is essential to measure Total Advertising Cost of Sale (TACoS) alongside ACoS. This ensures that advertising expenditure is always aligned with the contribution margin and the brand’s long-term value.

Prioritise Sponsored Products

Sponsored Products remain the backbone of Amazon advertising, capturing high-intent shoppers at the point of purchase. For this reason, allocating at least half of the available budget here is generally the most effective way to drive efficient sales. In the first instance, Sponsored Products must be fully funded; only then should Sponsored Brands and Sponsored Display follow.

Layering Campaign Types For Maximum Impact

Budgets perform best when campaign types work together, not in isolation. A layered approach allows each to play its role:

• Sponsored Products drive immediate conversions.

• Sponsored Brands build brand presence and funnel shoppers into the Store.

• Sponsored Display retargets shoppers and encourages repeat purchases.

Layering ensures spend supports every stage of the funnel, creating a structure where campaigns compound each other’s impact.

Dynamic Budgets, Not Static

Budgets must be flexible and responsive to demand. Major event days, such as Prime Day, Black Friday, and category-specific high points, provide opportunities for significant scaling. During these periods, more strategic targeting and strict bid management ensure margin maintenance. Moreover, utilising daily budget pacing and segmentation campaigns (for example, branded versus nonbranded or automatic versus manual) offers the necessary governance to quickly adjust spending in response to shifting performances.

Focus On Incremental Growth

While high ROAS campaigns are appealing, judging every campaign solely on efficiency is a mistake. The explanation is because certain campaigns introduce new customers to the brand or boost organic growth across the entire product range. Leading brands understand how to achieve a balance between immediate profits and long-term market leadership. Therefore, we should view Amazon’s advertising expenditure as an investment in both current sales and future brand value. Market Rocket specialises in developing advertising strategies that maximise profitability while generating sustainable growth for international brands.

Want to see your Amazon performance skyrocket?  Book a call with our team or email us at amazon@marketrocket.co.uk to take your brand to the next level.