When it comes to performance marketing offers, and really any offer in general, countries are often broken down into tiers. This is something that we have already discussed in-depth here if you’re looking for a general overview of the concept itself.
Just want a list? Here it is:
- Czech Republic
- New Zealand
- United Kindom
- United States
(Sometimes: Israel, Poland, Slovakia, Chile, Mexico)
Want to learn why these countries are on the list and others aren’t? Keep reading!
So what is Tier 1 exactly
Define Tier 1
So what is Tier 1 exactly? Tier 1 countries are the most desirable geographic areas for online marketing. The areas are divided along national lines. That is to say, a list of Tier 1 countries is going to be a list of different nations.
Organizing the tiering structure by nation isn’t a perfect system. In certain non-Tier 1 countries, a couple of cities might be much more desirable targets than many cities in Tier 1 countries, for example. That said, organizing geographic targetting on a national level has proven the easiest and simplest solution.
What are the criteria
But what are the actual criteria for being classified as a Tier 1 country?
You might not like to hear it, but… there are no official criteria. Each company and firm have their own idea of what it takes to be Tier 1. There simply isn’t a list of Tier 1 criteria that is administered by a disinterested third party like the Interactive Ads Bureau or something.
And likewise, as there are no official criteria, there is also no official list.
This means the whole concept is not only arbitrary but also inconsistent across different businesses.
Nevertheless, it is an almost universally utilized term and concept since everyone can more or less agree that the US is Tier 1, and Uganda is not.
A lot of different components
There are a lot of things that go into determining whether or not a country is Tier 1, but the primary criteria are simple. Look at wealth, size, smartphone penetration, internet penetration, and historic ad reactivity.
This is, by far, the most important criteria. If a country is poor, then it is not Tier 1. Full stop. If it has a low wealth per capita, it is not Tier 1.
GDP-per-capita or development index is probably the best way to look at national wealth as it relates to Tier.
Wealth, however, isn’t enough. A nation like Russia or China is objectively quite wealthy, but they rarely (if ever) get placed in Tier 1 lists because the purchasing power of a given consumer in these nations is simply too low (among other reasons).
Likewise, nations with very, very high GDP per capita or national wealth per capita might not make a Tier 1 list. Why? For this, see below.
This is the biggest caveat to the criterion of wealth.
Nations like Monaco, Lichtenstein, Kuwait, the UAE, etc. all boast robust economies and high per-capita wealth. But they also have tiny populations and therefore a very small base of users to whom one could advertise a product, service, or offer.
Even Switzerland, a comparatively large country, sometimes won’t make a Tier 1 list unless it’s tacked onto Germany.
Likewise, there is also too big. Countries like India and China, each of which counting more than a billion souls, are generally treated separately. If you want to run an offer for China or India, then it is probably going to be for these GEOs specifically.
This is the third most crucial aspect of assigning Tier. If you look at the list of Tier 1 countries at the beginning of this article, you might notice the over-representation of English-speaking countries.
You might also notice that there are no countries on the list that do not use the Latin alphabet and that most of those that are on the list also have high levels of competence in English.
You might have noticed right away that rich Asian countries aren’t on the list. Japan, Taiwan, South Korea, these nations all boast wealthy, engaged consumers, and large populations.
The wide linguistic and cultural differences between them and the other Tier 1 countries knocks them down to Tier 2 on most lists.
This is an important thing to keep in mind. Tier isn’t just wealth and population; it’s how in-demand these areas are for other online marketers.
And the most in-demand are anglophone countries and those either in Western Europe or culturally related to it.
Countries like China, Japan, India, etc. are generally targeted with offers that are only run there. They don’t fit in well with broader categories like Tier 1.
Is it Tier 1 or not? Countries on the border
When it comes to Tier, the borders aren’t always clear cut and, as we’ve seen, different companies tend to have different lists. And there are naturally countries that might be on one list but not on another.
The ones listed earlier in this article are the countries that are almost always considered Tier 1.
But countries like the Czech Republic, Poland, Slovakia, Taiwan, etc. are sometimes considered Tier 1, but are often not.
Again, there is no official list, and there are no official criteria for becoming “Tier 1.”
But one can generally guess without doing too much research.
Here’s a simple formula
If you don’t have time to look all this stuff up, ask yourself two simple questions: does this country have a high GDP per capita, and is this country relatively large?
If it checks both of those boxes, then it’s almost certainly a Tier one country. But remember: it’s not always that simple, but it usually is.
High Cost, High Return
They’re desirable because they’re wealthy, and they have developed consumer economies. Further, they tend to be linguistically accessible.
These users may cost a lot, but they’re expensive because they have the purchasing power that advertisers are looking for.
Oftentimes, people new to the industry will mention that the Tier system seems discriminatory, but in reality, it’s a reflection of a lot of different things.
And it makes communication between publishers and advertisers significantly easier.
The Tier system is something with which every online advertiser or affiliate is going to come into contact relatively early in his career.
However, what makes a Tier 1 country different from a Tier 2 country isn’t always immediately clear.
The criteria might be a bit arbitrary, but its usefulness is certainly not up for discussion!