Advertising Basics: What is a Tier of Traffic and What Tier Should You Choose?

Even if you are relatively familiar with CPA Marketing, as many affiliate marketers are these days, you might still have questions regarding CPA offers and the restrictions advertisers impose over locations traffic comes from.

You might have heard a term “Tier” while browsing forums, affiliate networks or from your account manager. A large percentage of advertisers mention that they would prefer receiving traffic from specific GEOs or Tiers. That’s quite natural, as every advertiser has marketing goals and they know what people they would prefer to see among their clients.

If you violate this condition and bring traffic from non-approved locations, the advertiser has the full right not to pay for these conversions. Obviously, it’s in your best interest to set all the geo-targeting precisely in accordance with what advertiser wants, and the Tiers stated in the offer. So, anyway, what does the “Tier of Traffic” mean? More about Geo-Targeting

What do advertisers usually want?

Generally, advertisers want specific sets of GEOs that are called “Tiers”. There are 3 tiers, based on clients’ purchasing power:

Tier 1 – a geo set that every CPA marketer desires to work with. The wealthiest countries and the most competitive GEOs.

Tier 2 – Less competitive locations and lower average income per person.

Tier 3 – Developing countries and consumers with a low purchasing power.

Here is the list (we have selected the most popular locations in each Tier):

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

 

In addition, we have  compiled a list of Tier 4 countries – countries under international sanctions, engaged in civil war or with collapsed economics:

Afghanistan, Côte d’Ivoire, Cuba, Democratic Republic of the Congo, Equatorial Guinea, Eritrea, Iran, Liberia, Libya, Myanmar, North Korea, Rwanda, Sierra Leone, Somalia, Sudan, Syria, Timor-Leste, Venezuela, Yemen, Zimbabwe

Apart from the purchasing power, there are some other criteria (advertising ones), which define what Tier the country would belong to:

  • Conversion price
  • Traffic price
  • Laws and regulations in each specific country

Working with each Tier has both pros and cons, and being a CPA marketer, you should weigh up all the options.

Tier 1

Pros Cons
Plenty of profitable offers Fierce competition
Widest range of traffic sources Very expensive traffic
High payouts Lots of highly experienced CPA marketers, working in this market for many years
Сlients speak English Strict regulation
Saturated market, it’s complicated to come up with attractive offers or creatives

 

Talking about the specifics of the Tier-1 offers, we should always keep in mind the regulation part.

For example, it’s getting harder and harder to promote some financial products like Binary or Forex. Regulators have strict requirements for creatives and the type of product promoted. This includes visible risk warning and limitations on some GEOs, for instance, you can’t promote leveraged products in France or Belgium.

As well, it’s important to keep in mind the relevance of the offers to the audience. Obviously, iOS software will be more popular in Tier-1 countries rather than in developing economies with lower purchasing power.

Tier 2

Pros Cons
Fewer frestrictions from regulators (in some GEOs) The need for localization of creatives and landing pages (Translating texts for specific markets is challenging and requires budget)
Cheap traffic (but the prices may vary heavily across the Tier-2 market) Lower profitability
Insane traffic volumes (Mexico, Brazil) Traffic does not generate high-quality leads

 

As the name suggests, Tier 2 is somewhere in-between wealthy Tier 1 and developing Tier 3 countries, and this principle applies to advertising costs, restrictions, and the quality of traffic.

Conversion rates are decreasing as we move towards Tier 3. Let’s say we have the same product, and if in the case with Tier 1 we would need an X number of clicks to sell it, in Tier 2 we would require a much bigger number of clicks to sell the very same product.

Tier 3

Pros Cons
Almost no legal restrictions Cultural and religious specifics; the need for localization
Very cheap traffic Low conversion rates and low quality of leads
Extremely low competition Payouts are also low

 

Despite the fact that Tier-3 GEOs might seem an easy catch, they still require lots of work and a good knowledge of local culture and traditions. Think about localization costs and types of creatives you would need to produce. For example, you can’t promote Tinder, Grindr or any other adult type of offer in Saudi Arabia as it would be in contradiction with the local culture.

But overall, Tier-3 GEOs are a great way to start your CPA marketing career: you can test various strategies and polish your optimization skills before you go for more serious profits.

Should you focus on Tier 1 only?

Limiting your activities to just one set of GEOs is, probably, the worst thing you can do. To make things work for you, you should try diversifying your campaigns (when an offer allows you) and test several GEOs.

Playing around with Tier 2 and Tier 3 can give you some benefits that are just as important as the size of payouts:

  • You are getting data. With volume and cheap traffic, you can get a lot of information on what clients prefer and what kind of creatives perform best. Split-tests are here to help you.
  • You can work with verticals that are not popular in Tier 1. For example, there are many restrictions on dating offers in Tier 1, but in Tier 2 you get much more freedom, and thus, profit.
  • It’s easier to sustain profitability in Tier 2 and Tier 3. Why? Because the competition is lower, and the budgets of your competitors are more modest as well.

Meanwhile, you should keep an eye on the countries that are underestimated by CPA marketers, but have high potential growth rate. That’s where eCommerce and various online services are thriving:

Egypt, Thailand, Vietnam, Nigeria, Saudi Arabia, India, Indonesia

That’s all we had to say about Tiers and geo-targeting. Have some comments or questions? Feel free to share your thoughts in the comment section below.