Choosing the right demographic is essential to digital advertising. You need to know what audience is more likely to buy your product or click on your ad. Targeting is crucial for any successful campaign, and one of the most important things to consider is which country the user is from.
It doesn’t mean that all customers from country X are the same, but it’s a valid, solid starting point for defining your campaign and hopefully boosting your sales.
How do you decide which country you should target with your ad campaign? This is where country tiers can assist you.
What are country tiers?
Country tiers are lists of countries, sorted by different economic and financial factors. Simply put, the wealthiest nations, the ones that have the highest salaries and disposable income are ranked at the top. Less economically developed countries, with less resources, are ranked lower down the list. This way, advertisers can understand, at a glance, which countries are a better target for their campaign.
Generally speaking, ad networks divide countries into 3 different tiers (or groups): Tier 1 Countries, Tier 2 Countries and Tier 3 Countries.
Tier 1 Countries
These are considered the richest, most desirable countries for advertisers to attract customers from. Their economies are the most developed, and they attract big corporations that run huge campaigns there. They also have the highest level of competition (because many advertisers target them), and usually the CPC is the most expensive.
Tier 1 countries include, for example, the USA, UK, Canada, Spain and Sweden.
Tier 2 Countries
medium wealth but a lower level of disposable income and GDP, compared to Tier 1 countries. Because of that, there’s less advertising competition, and the Cost-Per-Click is lower.
In these countries, many of the people know English as a second or third language, but the advertising is usually done in their native tongue.
Example countries: Brazil, China, Costa Rica, Egypt, Estonia, Greece, Israel, Japan, Mexico, Poland, Qatar, Thailand, Turkey and more.
Tier 3 Countries
Developing countries, low wealth and no disposable income. There are a lot of African countries in this list. These countries usually don’t have great technological infrastructure, which means there are less people using the internet. These are the cheapest countries to advertise in, and there’s not a lot of competition there. Usually, only local businesses and the government advertise in tier 3 countries.
Some of the tier 3 countries are: Tunisia, Uzbekistan, Vietnam, Jordan, India, Armenia and Albania.
Tier 1 countries – pros and cons
Pros:
- Target audience is more likely to spend money because of a larger disposable income.
- Higher payouts.
- English is the main language.
- Most customers have credit cards or other means of online payment.
- Huge audience, especially on mobile phones.
Cons:
- Traffic is expensive – CPC rates are the highest.
- Lots of competition.
- Market saturation.
- Regulations are strict.
- High usage of ad blockers.
Tier 2 countries – pros and cons
Pros:
- Traffic volumes are super big.
- CPC is cheaper than in tier 1 (although European countries in tier 2 are still pretty pricey).
- A little less legal restrictions.
Cons:
- Traffic quality is slightly lower than in tier 1.
- Lower payouts.
- In some of the countries, credit card usage isn’t widespread and they rely on cash
- You may need to translate your campaign to different languages.
- People tend to spend less money.
Tier 3 countries – pros and cons
Pros:
- Traffic is very cheap
- Competition is lower
- There are very few legal restrictions, if at all.
- Users don’t utilize ad blockers.
Cons:
- Low payouts.
- Traffic quality can be poor, leads are hard to turn to sales.
- You need to create a localized campaign, and that usually entails an extra cost.
Which country tier should you choose?
As with many other advertising considerations, there’s no single correct answer to that. Of course we all want to advertise to the wealthiest potential clients, but that’s not always the best strategy, and it really depends on the type of product you’re advertising and the budget you have.
Running campaigns for tier 1 countries only can be very expensive and you may be struggling for exposure because of the fierce competition. There’s usually more strict regulation, which can hinder marketing efforts. Another issue is market saturation – everybody wants to advertise to tier 1 countries and it’s hard to catch people’s attention.
Tier 2 countries can be a valid option for many advertisers, since the ad rates are lower and you may get a better ROI if you run a good campaign. It may also be the best place to start, if you have little experience in advertising and want to test the water before jumping into the deep end.
Take a look at the lists of Tier 2 countries, and think about your product, service or campaign. These are not poor countries by any means, but sometimes there are language barriers and cultural differences, and that’s why they are not in tier 1. Maybe you have a product that’s relevant for South Korea, Portugal or Qatar?
You may even want to consider tier 3 countries. Advertising there is cheap, there’s not a lot of legal restrictions and a lot of the users never even heard of ad blockers, which is an added bonus.