Determining the right audience is essential in digital advertising. You must know the audience likely to buy your product or click on your ad. Accurate routing is crucial to any successful campaign, and one of the most important things to consider is knowing which country the user is from.
This does not mean that all customers from Country X are the same person, but it is a valid and solid starting point for defining your campaign and sales pitch.
How do you decide which country to target in your ad campaign? Here comes the importance of country levels to help you with that.
Countries with tier 1 advertising are considered the most profitable markets and hold the highest revenue potential. Tiers 2 and 3 countries also have massive potential for display ads but are not as attractive as the higher ones.
Brands and companies want to advertise in the markets that have the most money, can understand their content, and empathize with what they have to say. Therefore, they collaborate with display ad networks that understand where these markets are located and how to access them online.
The networks then partner with bloggers, content creators, and website owners whose traffic originates from the markets and countries the advertisers aim to reach.
This article looks at how brands, companies, ad networks, publishers, and bloggers can work together to promote their advertising content in top-tier countries. It explains how traffic limits for ad networks are set to determine eligibility and what you need to do to qualify as a Tier 1 blogger. This article helps you better understand what tier 1 countries in advertising are and how stories affect income from display ads.
What are country tiers?
Country levels are lists of countries categorized by various economic and financial factors. Simply put, the wealthiest countries, and those with the highest salaries and disposable incomes, rank higher on the list. In contrast, economically less developed countries with fewer resources rank lower on the list. This way, advertisers can understand at a single glance which countries are a better target for their campaign.
Ad networks generally divide countries into three levels (or groups): Tier 1, Tier 2, and Tier 3.
Tier 1 Countries
The term “tier 1 countries” is used in marketing and advertising to refer to countries with large, affluent populations considered good markets for products and services. These countries typically have strong economies, high levels of disposable income, and a high degree of internet penetration.
The following countries are generally considered to be tier 1 countries in 2023:
- United States
- United Kingdom
Tier 1 countries are the most desirable advertising markets. They have highly educated populations with large disposable incomes and widespread internet access. English is typically the primary language in these countries.
These countries are all major markets for global brands, and they offer a large and growing pool of potential customers. They also have well-developed infrastructure and a favorable regulatory environment for businesses.
Tier 2 Countries
Tier 2 countries have average wealth and lower disposable income and GDP than tier 1 countries. Because of this, there is less advertising competition and a lower CPC.
Many people speak English as a second or third language in these countries, but advertising is usually done in their native language.
Here is the list of tier 2 countries in 2023:
- South Korea
These countries are considered tier 2 because they have large, growing economies and a significant middle class. They also have a high internet penetration rate, making them attractive business markets. Advertising competition is moderate, and costs are lower than in Tier 1 countries. English may be spoken as a second or third language in these countries.
Tier 3 Countries
Tier 3 countries have a lower GDP per capita and internet penetration rate than tier 1 and tier 2 countries. However, they still have a significant population and are growing economies, making them attractive business markets.
Some examples of tier 3 countries include:
- Sri Lanka
Tier 3 countries face more significant challenges for advertising due to factors like low GDP, limited internet access, and language barriers. Advertising competition is intense, and costs are cheap.
These countries offer an excellent opportunity for businesses to expand their reach and grow their sales. However, it is essential to research before entering these markets, as they may have different regulatory requirements and cultural norms than tier 1 and tier 2 countries.
Why Tier 1 Ad Countries Are So Profitable for Publishers
Bloggers are eager to appeal to visitors from Tier 1 countries mainly because of the potential for higher revenue. Tier 1 publishers with significant traffic from Tier 1 countries tend to receive much higher payouts from ad networks than those with Tier 2 and Tier 3 traffic.
Brands are willing to pay more to ad networks to ensure their marketing content is displayed in the most profitable markets, typically the Tier 1 countries. Ad networks can then pass on a larger share of these increased revenues to their publisher partners, including bloggers with a substantial audience from Tier 1 countries.
This creates a strong incentive for bloggers to target and attract visitors from Tier 1 countries, as it can significantly boost their advertising income and overall revenue. It’s a symbiotic relationship where advertisers benefit from reaching high-value audiences, ad networks benefit from higher payments, and bloggers benefit from increased earnings through their traffic’s value.
Tier 1 ad countries offer higher revenue potential, but advertising in these countries can be expensive due to intense competition and higher costs. Top ad networks often require publishers to demonstrate that most of their traffic originates from Tier 1 countries to be accepted.
Exclusively targeting Tier 1 traffic as a blogger may make it harder to attract a diverse readership and could limit potential engagement. Diversifying the audience to include Tier 2 and Tier 3 countries can provide a balanced approach, offering lower advertising costs and significant revenue opportunities while reaching a broader audience.
Which country tier should you choose?
As with many other considerations in the field of advertising, there is no one correct answer to this question. Of course, we all want to announce the more affluent potential customers, but this is not always the best strategy, and this depends on the type of product it is revealed and the budget available to you.
The operation of advertising campaigns can only be directed to Tier 1 countries, is very expensive, and may have problematic exposure to the public due to fierce competition. Usually, there is a stricter organization, which can hinder marketing efforts. Another problem is market saturation – everyone wants to announce the Tier 1 countries, and it isn’t easy to draw people’s attention.
Tier 2 countries are a good option for many advertisers, as advertising prices are lower, and you may get a better investment return if you implement a good campaign. These countries may be the best place to start if you have a little experience in advertising and want to test the water before indulging in deep water.
Look at the Tier 2 lists of countries, and think about your product, service, or campaign. These countries are not poor in any way, but sometimes there are linguistic barriers and cultural teams, so they are not within Tier 1. Maybe you have a product related to South Korea, Portugal, or Qatar?
So Tier 3 countries can be a possible option. Advertising in these countries is cheap, there are few legal restrictions, and many users do not even know about advertising, which is an additional advantage.