Overview and Features of Tier 1, Tier 2 and Tier 3 Countries in Traffic Arbitrage

There are a large number of audience parameters that arbitrageurs should pay attention to. It seems that the most important indicator is the theme. Indeed, finance is a much more expensive niche than entertainment. However, the most important aspect is still GEO. In this article you will learn what Tier 1, Tier 2 and Tier 3 are and why it is important to use proxies when working with audiences from different countries.

What is Tier and Why Is It Important?

All countries are usually divided into a number of categories. Tier is one category of a country. This division is based on the following parameters

• Level of economic prosperity. For example, Switzerland is a wealthy country with a high level of economic development, so it is categorised as Tier-1, while Nigeria is known for its corruption and unstable economic development, so it is categorised as Tier-3.
• The solvency of the population is the most important parameter. It's not even that the same product costs more in a tier-1 country than in tier-2 and tier-3, it's the buying sentiment. While it is normal and common for Americans to buy digital content such as books, people in countries with a low ability to pay would rather spend a few hours searching for free content on torrent trackers and other resources.
• The average income level is the official data that determines the monthly income of the population in a given category.
• Availability of payment methods. Obviously, if a user has several credit cards, e-money and other payment methods at hand, they are more likely to make a purchase. If it is necessary to run to the nearest terminal to make a cash payment or to confirm the payment by SMS, the likelihood of purchase is reduced.
   

Tier-3 Countries - Overview

Tier 3 countries are those with the lowest ability to pay and the lowest standard of living. In simple terms, they are cheap traffic. These countries traditionally include Algeria, Cuba, Eritrea, Madagascar, Saudi Arabia, Zimbabwe and Somalia.

Of course, the fact that it is cheap traffic does not mean that it is not worth working with. One of the main characteristics is that these are emerging markets, albeit poor ones. But that is exactly what opens up a lot of opportunities. In the United States, for example, the payday lending market is already well regulated, and in some states such services are banned. But in Tier 3 countries, payday loans are very popular and the population does not have a high level of financial literacy, resulting in high click-through and conversion rates.

The same situation applies to other niches. In poor countries, for example, there is a high level of interest in gaming and casinos.

In terms of devices, there are fewer iPhone users, but more of those who prefer Android. 

There are different classifications. Tier 3 includes India and China, which is not quite correct. In addition, arbitrageurs usually have limited ability to operate in many markets due to language and legal issues.

It is better to work in Tier 3 if you have a clear idea of what you are offering and who you are targeting. It is hardly worth entering the market of Papua New Guinea or Iran just like that. Especially if you are just starting out in traffic arbitrage.

The main advantage of this category of countries is the open-mindedness of the users, who try everything new and are willing to pay relatively little money for the purchase of goods and services.

Tier-1 Countries - Overview

Tier 1 countries are the wealthiest and most successful. Traditionally, these include the United States, Canada, Australia and the developed part of Europe. However, the choice is quite wide and includes New Zealand, Nicaragua, Mauritius, Taiwan, South Korea and many others.

Users in Tier 1 countries usually have a good command of English, but since marketing is always closely related to psychology, arbitrageurs pay special attention to local languages. For example, if you want to promote a product or service in the German market, it is probably better to do so in German.

The population of Tier 1 countries is characterised by high financial literacy, good incomes, many people use iPhones or expensive Android smartphones. However, we should not forget that there are also poor people living in rich countries. So there is a demand for games, casinos, education and the like.

Typically, affiliate fees in this market are quite high. For example, when it comes to investment applications that allow you to invest in stocks and other assets, affiliates can receive from $100 per registration.

When it comes to some specific solutions, such as Gold IRA (a US government-approved investment programme that allows you to add physical gold to your investment portfolio), affiliate fees can run into thousands and even tens of thousands of dollars!

Tier-2 Countries - Overview

Tier-2 is the largest category of countries. It includes European countries, developed countries on the African continent, as well as the UAE, Uganda, Turkey, Venezuela and many others located in different parts of the world.

Working with Tier-2 countries, arbitrageurs can achieve high success where no one expects it. For example, you can get good royalties by promoting an unremarkable application on the Albanian market. 

Competent monitoring of small local markets opens up a wide range of opportunities. 

What are Tier-4 Countries?

There are usually only three tiers of countries, but sometimes there is a category called Tier 4. These are countries with a very low level of political and social stability. In Afghanistan, for example, education for girls and women is forbidden. Therefore, it will not be possible to promote classic women's offers in this market, because many Afghan women simply cannot read, cannot use smartphones and do not even have them.

Another example is Iran, a country that has been under severe sanctions for many decades. It is very difficult for arbitrageurs to operate here. Chad, North Korea, Togo - many of these countries have never been heard of. 

These countries can and usually do have problems accepting payments and paying arbitrageurs.

Traffic Costs by Country Rank

As you can see, payments in Tier 1 countries are much higher than in other categories. The flip side of this is that traffic is also the most expensive. This is obvious and justified. For example, when buying advertising in Google Ads, a click can cost several or even several dozen dollars. Nobody will be surprised to learn that it costs hundreds of dollars to acquire a customer.

Conclusion

There is no best or worst category for arbitrageurs to work in. A skilled arbitrageur working in a poor market in a Tier 3 country can earn a lot more than someone promoting expensive offers to Americans or Canadians, and vice versa.

In any case, whichever option you prefer, it is always important to use a proxy. This will allow you to remain anonymous and not have to worry about bans and other restrictions that arbitrageurs often face.

The best on the market are proxies from KeyProxy. Mobile proxies with automated management, stable uptime and high speeds of up to 90 Mbps allow you to manage your ad campaigns worldwide while keeping your working ad accounts anonymous and secure!