country tiers digital advertising

Understanding Tier 1, 2, & 3 Countries In Digital Advertising

Sam Carr

Sam Carr

October 29th, 2020

Sam obsesses over three things in life: Animals, Films and Marketing. We may have over exaggerated his love for marketing.

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When it comes to digital advertising, it should be no surprise to anyone that certain demographics are more valuable to advertisers than others. After all, who’s more likely to buy your product: someone with lots of money, or someone who’s broke? (Hopefully, you picked someone with lots of money!).

Well, the same concept applies to countries as a whole, which means certain countries are more valuable than others when it comes to advertising.

By now you’re probably wondering, what determines how valuable a country is and which countries are the most desired?

In this article, we’re going to be exploring country tiers in digital advertising and the various tiers advertising networks and advertisers use to sort countries.

To get started, let’s dig a little deeper into the concept of country tiers.

What Are Country Tiers?

advertising country tiers

If you’ve ever played Madden or FIFA, then the concept of a tier list should be pretty straightforward. You take the teams (in this case countries) and arrange them from the very best to the worst based on their players and overall strength. In the end, you have a tier list of all the teams which would help you decide which team to pick if you want to significantly increase your chances of winning.

The same concept applies to countries, but instead of ordering them based on their players, they are ordered by economic factors instead. This means that the wealthiest nations with the highest salaries and disposable income are ranked highest while the less economically developed countries are ranked lowest.

The result is a list of countries which gives advertisers an idea of which countries have more wealth and disposable income. Similar to the analogy above, advertising in the wealthiest countries significantly increases the chance of conversions compared to less developed countries.

The Different Country Tiers In Advertising

In today’s world, most ad networks and advertisers recognize three tiers of countries with tier 1 being the most valuable and tier 3 being the least valuable.

A quick overview of the different country tiers would look like this:

Tier 1 Countries

The most desirable countries advertisers want to advertise in. The wealthiest with the highest levels of disposable income. Highest levels of competition, expensive CPCs.

Tier 2 Countries

Countries with medium wealth and a lower level of disposable income. Lower competition and lower CPCs than tier 1.

Tier 3 Countries

Developing countries with low wealth and no disposable income. The cheapest countries to advertise in with very few advertisers running ads.

Advertising Country Tier List

advertising country tier list

By now you’re probably wondering which countries come under which tier. Unfortunately, different advertising networks use slightly different models when it comes to organizing them so a tier 2 country could be a tier 3 country on a different network.

Not to mention that over the years certain country’s economies can change, which in turn can change the tier they are in.

To give you an idea of the different country tiers, here is a general country tier list:

Tier 1 Countries Tier 2 Countries Tier 3 Countries
Australia Andorra Albania
Austria Argentina Algeria
Belgium Bahamas Angola
Canada Belarus Armenia
Denmark Bolivia Azerbaijan
Finland Bosnia and Herzegovina Bahrain
France Brazil Bangladesh
Germany Brunei Barbados
Ireland Bulgaria Belize
Italy Chile Benin
Luxembourg China Botswana
Netherlands Colombia Burkina Faso
New Zealand Costa Rica Burundi
Norway Croatia Cambodia
Spain Cyprus Cameroon
Sweden Czech Republic Cape Verde
Switzerland Dominican Republic Chad
United Kingdom Ecuador Comoros
United States of America Egypt Congo
Estonia El Salvador
Fiji Ethiopia
Greece Gabon
Guyana Georgia
Hong Kong Guatemala
Hungary Guinea
Iceland Haiti
Indonesia Honduras
Israel India
Japan Iraq
Kazakhstan Jamaica
Latvia Jordan
Lithuania Kenya
Macao Kuwait
Malaysia Kyrgyzstan
Malta Laos
Mexico Lebanon
Montenegro Lesotho
Morocco Macedonia
Nepal Madagascar
Oman Mali
Panama Mauritania
Paraguay Mauritius
Peru Moldova
Philippines Mongolia
Poland Mozambique
Portugal Namibia
Puerto Rico Nicaragua
Qatar Niger
Republic of Korea (South) Nigeria
Romania Pakistan
Russian Federation Senegal
Saudi Arabia Sri Lanka
Serbia Suriname
Singapore Swaziland
Slovakia Tajikistan
Slovenia Tanzania
South Africa Togo
Thailand Trinidad and Tobago
Turkey Tunisia
Ukraine Turkmenistan
United Arab Emirates Uganda
Uruguay Uzbekistan
Vanuatu Vietnam
Zambia

As you can see, some of the most desirable tier 1 countries are the USA, UK and Canada. Mainly because they all speak English, have very developed economies, and high levels of disposable income.

Compare these countries to something in the tier 3 list such as Uganda, and the differences are clear. With a gross domestic product of only 27 billion USD compared to the USA’s 20 trillion, Uganda is also listed on the UN’s list of least developed countries.

If you’re trying to sell AirPods or the latest designed clothes, then it’s pretty obvious you should be targeting tier 1 countries.

Tier 1 Countries

  • The wealthiest countries in the world
  • Most expensive to advertise in
  • Highest levels of competition
  • All English speaking countries

Tier 1 countries include the likes of the USA, UK and Australia. These countries are considered the most developed and desirable countries by advertisers for various reasons.

The first is that they have very developed economies and lots of money to spend. This attracts big corporations like Apple and Samsung, who can happily spend millions of dollars advertising their products, knowing they will get a return.

In addition to being the most developed countries, these countries also all understand English which is another reason why they are so desirable. Since they have the most English speakers and money, it also makes them the most competitive.

With millions of advertisers, prices for advertising in tier 1 countries is very high across almost every advertising network. Here are some cost per click prices from the UK for a selection of keywords in Google Ads.

Keyword Top Of 1st Page Bid (UK)
car insurance £6.66
mobile phones £1.33
plumber £6.50

Tier 2 Countries

  • Less GDP and income than tier 1 countries
  • Heavily discounted prices compared to tier 1 countries
  • Less competitive
  • Most countries have English as a second language

Countries in the tier 2 category include Brazil, Japan, China and Turkey. These countries usually miss out on the tier 1 category for a number of reasons relating to economic status or language barriers.

Most countries in the tier 2 category often have lower GDPs than their tier 1 counterparts, but still have fairly well-developed economies. They might not be their primary target for many big companies, but there will still be a lot of competition from national nationwide companies.

Many of the countries in tier 2 also usually speak English as a second or third language with their primary language dominating advertising. This is why countries such as Japan and China who have huge GDPs and economies aren’t listed as tier 1.

Compared to tier 1 countries, prices for advertisers is considerably lower across advertising networks. Here are some cost per click prices from Turkey for a selection of keywords in Google Ads.

Keyword Top Of 1st Page Bid (Turkey)
car insurance £5.32
mobile phones £0.20
plumber £0.68

Tier 3 Countries

  • The lowest GDP countries
  • Extremely cheap to advertise
  • Almost no competition
  • Most countries don’t speak English or have little understanding

Countries in the tier 3 category include Albania, Iraq and Nigeria. Compared to the other tiers, these countries often have the least developed economies and the largest language barriers.

With many of these countries having considerably fewer people online, and not a lot of money to spend, advertising is extremely cheap. This low competition means clicks and banner views can be picked up for just a few cents each.

With access to the internet being very limited and language barriers, it’s clear why prices are so low. Usually, the only companies that advertise in the country are local businesses or their own governments.

Tier 3 countries often have some of the lowest advertising rates available. Here are some cost per click prices from Nigeria for a selection of keywords in Google Ads.

Keyword Top Of 1st Page Bid (Nigeria)
car insurance £1.39
mobile phones £0.13
plumber £0.30

Which Country Tier Should You Focus On?

which country tier

Now you understand the different country tiers, you’re probably ready to adjust your campaigns and only run ads in tier 1 countries, but hold your horses!

Running campaigns solely in tier 1 countries can be very competitive and therefore expensive. There are actually plenty of tier 2 countries that offer much lower advertising rates yet could potentially offer you a better return on investment compared to tier 1 countries.

In most cases, there is only a small language barrier when it comes to tier 2 countries, and many have thriving economies.

Take South Korea, for example, with a GDP of 1.6 trillion dollars, it’s by no means a developing country. The reason it’s listed as a tier 2 country is likely to do with the language barrier and cultural differences. If you sell a product or service that can be used in Korea, then translating your ads and landing pages into Korean could be an excellent way to capitalize on that opportunity. Running your ads in English will most likely not perform as well, so translation would definitely be required.

Another excellent example of a tier 2 country to advertise in would be Portugal. Located right next to the tier 1 country Spain, Portugal has a GDP of 240 billion USD. It’s most likely listed as a tier 2 country because of the language barrier and their smaller economy. Although their primary language is Portuguese, many residents also speak fluent English, making it a good choice for advertisers. With lower advertising costs compared to other native English speaking countries, it can be a hidden gem for many advertisers.

Hopefully, by now, you can see that exclusively advertising in tier 1 countries isn’t necessary. Depending on what product or service you are selling, you can pick up much cheaper prospects by targeting the lower tiers instead.

If you’ve ever wondered why it costs more to advertise in certain countries, then hopefully this article has answered all your questions. The simple answer is: it’s all based on supply and demand.

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