Tier — is a level or category. In traffic arbitrage, this term refers to groups of countries that are conventionally divided by traffic cost, audience purchasing power, and other market indicators.
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Tier-1 — countries with high purchasing power and usually expensive advertising traffic. These often include the United States, Canada, the United Kingdom, Australia, and Western European countries.
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Tier-2 — countries with medium traffic costs and purchasing power. This group often includes countries in Eastern Europe and Latin America.
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Tier-3 — countries where traffic is usually cheaper, but the audience’s purchasing power is also lower. This may include certain countries in Asia, Africa, and other developing markets.
At the same time, there is no single list of countries for each Tier. Different advertising networks and affiliate programs may divide GEOs differently depending on their audience and conditions. Therefore, Tier-1 does not always mean more profitable traffic than Tier-2 or Tier-3: everything depends on the specific offer, advertising cost, and revenue per user.
Why Tier is used in traffic arbitrage
Dividing countries into Tiers helps estimate the characteristics of an advertising market in advance. For example, Tier-1 usually requires a larger advertising budget, but one customer or buyer can generate more revenue. In Tier-3, you can start with lower costs, but revenue per user will often be lower.
Therefore, Tier is taken into account when choosing a country for launching an advertising campaign, calculating the budget, and estimating potential profit.
