What are Tier 1, Tier 2, and Tier 3 countries in traffic arbitrage: meaning, list

The topic of country classification in traffic arbitrage is still a subject of much debate. Why might a country be listed as Tier 2 today and move to Tier 1 tomorrow? This is influenced by the income level of the audience, competition among arbitrageurs, local laws, politics, and how quickly the market is changing. In this article, we will analyse what is actually behind the division into Tier 1, Tier 2, and Tier 3, how these groups differ from each other, and what their characteristics, risks, and prospects are.

Tier 1 countries in traffic arbitrage

Tier 1 is a conditional list of countries in traffic arbitrage, which includes the most solvent and developed markets. This means that GEOs in this category have the following characteristics:

• high income level of the population;
• developed digital infrastructure;
• a solvent audience accustomed to paying online;
• the availability of payment gateways and convenient local payment methods;
• high-quality traffic.

When people say ‘Tier 1,’ many think of the ranking of countries: the United States, Canada, Australia, New Zealand, Britain, and all of ‘big’ Western Europe. Everyone knew that bourgeoisie, where it was expensive and difficult to get into, but which newcomers dreamed of. These GEOs remain strong players, but the modern Tier 1 has long since expanded beyond this list.

If you look at recent cases, statistics on income, internet speed, mobile traffic volume and behavioural metrics, it becomes clear that the countries of the Middle East and developed Asia confidently occupy positions among Tier 1 countries. These are regions where the audience is actively online, not afraid to spend money, quick to make decisions, and generally shows much healthier indicators than many classic ‘bourgeois’ GEOs.

We can conclude that the current Tier 1 rating differs significantly from the long-established list. Today, it is not just the ‘rich West.’ The lists vary across different resources, but we would like to highlight the following countries:

• Australia and New Zealand.
• Classic Western European countries.
• The United States and Canada.
• The UAE.
• Saudi Arabia.
• Kuwait.
• Qatar.
• Singapore.
• South Korea.
• Japan.

It is important to understand that Tier 1 status is not an award, but an indicator of the real situation in the world at the moment. In a year, the situation may change, and history already knows dozens of such examples.

Tier 2 countries in traffic arbitrage

Unlike the top of the market, Tier 2 is a strong, working middle ground that supports a huge part of arbitration. And often it is here that the most stable profits lie, because competition is moderate, the audience is large, and the rates, while not astronomical, are quite pleasant.

Tier 2 refers to countries where the standard of living is lower than in the classic bourgeoisie, but people actively use the internet, make online purchases, and respond normally to advertising. Here, you can work with almost any vertical: from food and goods to dating and gambling — and get normal results.

If we collect data from recent cases, affiliate tables, and market analytics, the list of Tier-2 countries includes:

• most of Central and Eastern Europe: Poland, the Czech Republic, Romania, Bulgaria, Croatia;
• certain CIS countries that maintain the solvency of their audience;
• almost the entire Latin American market: Mexico, Colombia, Peru, Chile, Argentina, Brazil (although it is already on the verge of transitioning to Tier-1 in terms of traffic cost);
• 'awakening' Africa: Kenya, Nigeria, Ghana, Morocco – regions that many still consider unpromising, but web cases prove otherwise;
• dynamic Asian countries: China – a huge market with enormous purchasing power, but a limited firewall, which complicates the flood; India could easily become an ‘alternative Tier 1’ in terms of overall prospects in a couple of years.

Tier 2 geos are not a compromise, but often the very countries where arbitrageurs earn stable profits.

More arguments in favour of Tier-2:

1. Huge audience size. In Brazil or India, for example, a billion users give arbitrageurs more opportunities than in small, oversaturated Switzerland.
2. A variety of verticals. The following work well here: iGaming (especially in Latin America and Africa), dating, finance, nutra, and commodities.
3. Less competition. Yes, arbitrageurs are already actively pouring money into this market, but it is far from overheated. The audience is not as tired of advertising as it is in the bourgeoisie.

Many countries have grown significantly in economic terms, improved their internet infrastructure and gained a huge mobile audience. Competition in these countries is not yet as fierce as in Tier-1, and the market is lively and growing.

Features of Tier-3 countries in advertising arbitrage

Tier-3 includes the poorest countries with low standards of living: weak healthcare, unstable education systems, and low purchasing power of the population. This category includes countries with low economic indicators in Asia, Africa, and Latin America.

Features of Tier-3 GEOs:

1. Cheap but huge traffic.
2. The audience is not burned out.
3. The mobile segment is growing the fastest.
4. Basic, ‘simple’ approaches work.
5. Limited payment methods.

Tier 3 appears chaotic and unpredictable in places, but these are GEOs that are in the process of active development. Technically, the internet infrastructure there is still being formed, mobile internet is often unstable, and many users access the network exclusively from older smartphone models. However, it is precisely because of these conditions that traffic here is dirt cheap and competition remains low.

Why this is important to know

In this whole story with tiers, it is not specific tables from arbitration publics that matter, but your actual profit. A mistake in choosing a GEO can cost you your budget, which is why ‘blindly trusting classifications’ is a bad idea.

The market is changing faster than training guides can be updated. Countries are growing economically, audiences are maturing, laws are being rewritten, the internet is becoming more accessible — and as a result, yesterday's Tier 3 suddenly starts to give better CR than the overheated Tier 1. And the quiet Tier 2 unexpectedly turns into an entry point where profit is literally at your feet.

In order not to miss the mark, it is important to look at the real factors that determine the quality of traffic: geopolitics, living standards and economic indicators, internet access, market competition, legislation, and payment methods. Each of these factors influences whether you will end up in the black. Therefore, ‘tiering’ is not a dogma, but only a guideline that helps advertisers set bids and arbitrageurs understand where to look first.