The third quarter (Q3) on Amazon is a unique beast. Spanning July through September, Q3 includes summer Prime Day, the tail-end of summer sales, the entire back-to-school rush, and even the early stirrings of holiday prep (hello, Halloween!). For Amazon sellers and brands, Q3 is a pivotal time to fine-tune your marketing budget. Invest wisely now, and you set yourself up for a strong Q4 finish. Spend blindly, and you risk burning through funds with little to show. This guide walks you through how to allocate your Amazon marketing budget in Q3 for maximum return on investment (ROI), backed by data and best practices.

Why is this important?

Amazon’s advertising business is booming — it surpassed $30 billion in ad revenue in 2023 and is on track to reach $40 billion by 2025. With more brands pouring money into Amazon ads, competition and costs are rising. In fact, rising ad costs are cited as the #1 challenge for brands selling on Amazon, and return on ad spend (ROAS) has dipped across several ad types recently (junglescout.com). Strategic budget planning is more critical than ever. Let’s dive into how to make every dollar count.

1. Start with Q3 Priorities: Key Events and Products

Begin by mapping out the key sales drivers in Q3 for your business:

Prime Day (usually mid-July): Amazon’s marquee sales event generates massive traffic. In 2024, U.S. e-commerce sales during Prime Day hit a record $24+ billion — a 30%+ year-over-year growth (TechCrunch). If you participate, allocate a significant portion of your July ad budget to the days around it. This might mean 2-3× your normal daily spend, focused on deal items or bestsellers. The payoff? Prime Day conversion rates often spike since shoppers come ready to buy. (Amazon’s average conversion rate for Sponsored Products is ~9.5%, and it can be even higher during Prime Day due to deal frenzy.)

Back-to-School (August peak): If you sell products related to students, school, or office, late July through August is prime sales season. Allocate budget accordingly. For example, a dorm decor brand might ramp up Sponsored Brands ads in early August as college students begin shopping. Nearly 46% of back-to-school spending happens in August (fitsmallbusiness.com), so keep some budget in reserve for a strong late-summer push.

Other Seasonal Promotions: Depending on your category, Q3 might include summer clearance (July) or early fall promotions (September) for categories like clothing, outdoor gear, or early Halloween prep. Set aside budget accordingly. For instance, sunscreen brands may spend heavily in July, while costume brands allocate more for September.

New Product Launches: Launching new SKUs in Q3 often requires higher initial ad spend to gain traction and reviews. Budget extra for launch campaigns—they may have higher ACoS at first but are investments in future ranking. Many brands allocate a separate “launch budget” distinct from business-as-usual advertising.

By outlining these priorities, create a budget calendar that might allocate, for example, 40% of the quarter’s ad budget to July (Prime Day), 35% to August (Back-to-School), and 25% to September. Match your budget to opportunity rather than evenly distributing spend.

2. Allocate by Amazon Advertising Channel for Balance

Amazon offers multiple ad types – each with a role to play. A smart Q3 budget allocates across these to cover the full funnel and maximize ROI:

Sponsored Products – ~50% of Budget (Core Driver): These cost-per-click ads appear in search results and product pages and often deliver the highest immediate ROI by targeting active shoppers. Prioritize top-performing products and high-converting keywords. A 2025 study shows Sponsored Products campaigns average about 3.3x ROAS (sequencecommerce.com), making them a reliable investment. Optimize bids on your best keywords—e.g., bid more aggressively on “wireless earbuds” for back-to-school electronics.

Sponsored Brands – ~20% of Budget (Brand Building + Cross-Sell): Sponsored Brands showcase your logo and product line, boosting brand awareness and cross-selling. They usually have lower immediate conversion than Sponsored Products but increase overall exposure. Use them around Prime Day for category pushes (e.g., “Travel Gear Sale” or “New Fall Collection”). If you have an Amazon Brand Store, Sponsored Brands can drive traffic there for a curated shopping experience. Videos in this format often have higher click-through rates.

Sponsored Display – ~10% of Budget (Retargeting and Niche Targeting): Sponsored Display retargets shoppers who viewed but didn’t buy your products and can also place ads on competitor listings or off-Amazon sites. Useful for high-consideration purchases, it generally has lower ROAS but incremental lift in conversions. Segment your campaigns—e.g., run retargeting ads offering discounts to nudge hesitant buyers.

Amazon DSP or Other – ~10% (Optional Advanced Spend): Larger brands with Amazon DSP access can use display and video ads to reach audiences on and off Amazon (Fire TV, websites). This is more upper-funnel and cost-intensive, so it’s optional. Alternatively, invest in external traffic sources like Google or Facebook Ads driving to your Amazon listings, tracking results with Amazon Attribution. Some brands report a 203% ROAS this way (junglescout.com).

This breakdown (50/20/10/10) is a starting framework. Adjust based on your results. For instance, if you find Sponsored Brands video ads are performing extremely well (maybe 5:1 ROAS), you might up that share. The key is to not put all your eggs in one basket – diversify so you capture customers at different stages. 

3. Optimize Bids and Budget Pacing for ROI

Having a budget is one thing; spending it efficiently is another. Use these tactics:

• Placement and Bid Adjustments: Boost bids (+50% or more) for top-of-search placements on high-converting keywords—they convert 2x or more compared to other placements. Monitor performance regularly.
  
  
• Dayparting: Use data to concentrate spend during high-converting times (e.g., weekends in July/August). Reduce bids or budgets during low-traffic times like late nights.
  
  
• Dynamic Bidding & Budget Rules: Use Amazon’s “dynamic bids” (up & down or down only) to let Amazon adjust bids based on conversion likelihood. Experiment to find which delivers better ROI. Set budget rules to increase spend automatically on Prime Day or if campaigns run out of budget mid-day.
  
  
• Monitor ACoS and TACoS: Track Advertising Cost of Sales (ACoS) relative to profit margins. Pause or adjust campaigns exceeding target ACoS without clear benefit. Monitor TACoS (ad spend as % of total sales) to ensure ads also drive organic growth.
  
  
• Focus on Conversion Rate – Quality over Quantity: Target more specific, high-intent keywords instead of broad, expensive terms. Ads targeting precise audiences can yield ROIs as high as 10:1 (vapa.ai).

While this article is about marketing budget, note that not all traffic requires paid ads. Some of the best ROI in Q3 can come from organic improvements, which cost more time than money. Allocate a portion of your marketing efforts (if not direct budget) to Amazon SEO and content optimization:

• Listing SEO: Optimize product titles, bullet points, and descriptions with relevant Q3 keywords (“back-to-school,” “college essentials”). Better organic rankings reduce your need for paid ads.
  
  
• A+ Content and Storefront Updates: Use Brand Registry features to add rich content and create Q3-themed storefront sections (“Back to School”) that build trust and boost conversion rates, lowering ACoS.
  
  
• Cross-Promotion: Leverage Amazon Posts or Amazon Live (live-stream demos) to drive free organic traffic and engagement.

Think of organic optimization as stretching your budget—better content means more sales from the same ad spend.

5. Review, Learn, and Iterate Monthly

Q3 spans three months – treat each as a learning cycle. At the end of July and August, do a quick review:

• What was our ROAS/ACoS for the month? Did Prime Day spend pay off proportionally? For example, if you allocated 40% of budget in July, did it yield 40% (or more) of your sales? If not, analyze if overspending or if some campaigns underperformed.
  
  
• What products or keywords emerged as winners? Perhaps you discovered a new search term converting well for your product – you can allocate more to it in August/Sept. Or a product that you didn’t plan to advertise much suddenly started trending – consider shifting budget to capitalize on that.
  
  
• Where did we waste spend? Check for any money pits – maybe you accidentally kept a broad match ad running that spent $500 on irrelevant clicks. Plug those leaks by tightening targeting or negative keyword additions.
  
  
• Adjust budgets for next month: Based on July’s data, you might decide to reallocate August’s plan. For instance, if Prime Day left you with a stellar July but you see August forecast looking slower, you might move some unspent budget to boost August campaigns (especially for back-to-school week). Conversely, if July ads overshot with lower ROI, you might scale back a touch and focus on the highest performers.

By the time Q4 arrives, you’ll not only have maximized Q3, you’ll also have a wealth of data to inform your holiday strategy. Many brands that carefully optimize in Q3 find themselves in a stronger organic position for Q4, meaning they can either save ad dollars or double down and completely dominate categories when the holiday peak hits.

In Summary

Allocating your Amazon marketing budget in Q3 requires balancing big events and steady sales, multiple ad types, and paid plus organic efforts. Amazon rewards smart, flexible planning. The average advertiser sees strong returns (often $4+ sales per $1 ad spend), but continuous optimization is key.

Plan ahead, monitor results, and reallocate as needed. Q3 can be highly profitable when you leverage Prime Day, capture back-to-school demand, and optimize for ROI.

If you want expert help, Algofy specializes in Amazon marketing and budgeting. We’ve guided brands through Prime Day spikes and seasonal swings to record sales. Contact us for a free strategy call and make Q3 the launchpad for your best Q4 and year-round Amazon growth. Let’s make your ad dollars work harder and smarter.