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Comparison of Tier 1, Tier 2 and Tier 3 Countries - Which Tier is Better for iGaming Business
Despite the extremely high level of competition, the iGaming sector is still a very attractive place to do business. Today, many are considering launching their own betting or online casino platform. In addition, there are affiliate marketers who see iGaming as an excellent source of passive income provided through the promotion of gambling/betting products. However, the question is, in which countries will these products be most in demand?
Based on the value of digital advertising, we can distinguish several groups of countries. Many marketers apply ‘Tier’ to them thus emphasizing the average income level of the population in different countries worldwide. How can Tier 1 traffic be more valuable than that received from Tier 3 countries? Which tiers should be targeted when promoting iGaming products as an affiliate? This article gives answers to all these and many other questions concerning the promotion of iGaming offers.
Things to Know About Tiers and Segmentation Features
You have probably cheered for your country's national football team in the World Cup. Have you ever wondered how countries are selected for the group stage of this popular competition? The organisers rank the teams (countries) from best to worst, taking into account a variety of factors including overall strength as well as the individual qualities of athletes. Eventually, the teams are divided into groups (tiers) to make the football event even more entertaining for the fans.
Digital marketing uses much the same principle, organising the world's countries according to economic factors such as average income. According to this concept, economically developed countries with high wages correspond to Tier 1, while less economically developed countries may fall into Tier 2 or Tier 3. Consequently, marketers have access to lists of countries ranked by disposable income. Developed countries are much more likely to convert from advertising. However, let's take a closer look at these tiers.
Tier 1 Countries
Among all countries in the world, Tier 1 is the most in demand by digital marketers including even those promoting iGaming offers even though this vertical is quite sensitive. The main reason is the high purchasing power of people in the USA, Canada, Australia and some other countries belonging to this tier. For example, in Germany, the average annual wage was about $62,500 in 2023 according to Statista. With a high standard of living, developed infrastructure and mature markets, Tier 1 countries are the number one choice for affiliates. So let's take a look at the key factors that make Tier 1 countries so attractive:
· Due to high income levels, locals are willing to spend their money on entertainment including iGaming providing high revenue for both operators and marketers promoting the platforms.
· Strict regulation and high levels of trust in brands. With consumer protection laws in place, user trust is high, making it easy to promote products in different niches.
· Well-developed digital infrastructure. Virtually every citizen of a Tier-1 country can afford one or more devices connected to high-speed internet. Moreover, marketers can use sophisticated strategies including Big Data and AI, Programmatic advertising and multimedia formats.
· A well-developed culture of online entertainment consumption. For example, more than 64% of adults in Canada and Australia bet or gamble in some form during the year.
In addition, developed countries attract large advertisers and developed affiliate networks providing good Tier 1 countries advertising opportunities. Marketers who choose to target Tier One countries have access to exclusive offers, quality creatives and high commissions on CPA and other payment models.
Tier 2 Countries
Generally economically stable, GEOs belonging to this tier are characterised by middle-income populations. Tier 2 countries tend to have large populations. These typically include Turkey, Brazil, Japan, the Czech Republic and some other fairly developed economies.
Tier 2 markets are interesting for long-term campaigns as there is a constantly growing interest in various products including iGaming platforms. They are also recognised by a lower level of competition, developing digital infrastructure and more or less stable regulation in the field of online gambling.
Tier 3 Countries
If marketers can afford to turn a blind eye to such an important factor as low purchasing power, they choose Tier 3 to promote offers. This is balanced by the huge number of potential users who are easily interested in what gambling affiliates offer.
Two other factors make Tier 3 a pretty good choice. Firstly, it is quite low competition and access to cheap traffic, which reduces CPA costs. Secondly, it is a fairly well-developed infrastructure of mobile data transmission, which facilitates the easy promotion of mobile-friendly products.
Tier 4 Countries
Although the term ‘Tier 4’ is quite rare, some marketers use it to characterise countries with an unstable political scene and extremely weak economies. In simple words, these countries are rarely considered for promoting iGaming and other products. With extremely limited digital channels and a ban on many products, they discourage affiliate marketers willing to promote offers for commissions.
Income Levels of Marketers in Different Countries
Although the work of an affiliate marketer is full of unexpected twists and turns and exciting features that make it interesting, affiliates primarily want to generate income from their activities. From the paying capacity of the population and the specifics of local legislation to the sophistication of the digital infrastructure, many factors influence affiliate profits - let's look at each tier separately.
Tier 1
Providing the highest value to advertisers, Tier 1 markets offer the highest salaries for marketers, which can be as high as $120,000 per year. Due to the high LTV of the target audience - despite high competition and large ad spend - here CPAs are as low as $200-300 per client and payouts under the RevShare model are as high as 40-50% of advertiser revenue.
Tier 2
These GEOs can be attractive to those who find it harder to stand up to strong competition. However, lower buying power - and more difficulty in monetising traffic accordingly - is the flip side of the coin. Marketers working with Tier 2 markets can expect salaries of up to $50,000 per year. As for affiliates (including those working with iGaming affiliates), CPA and RevShare payments here reach $30-100 per customer and 15-30% of the operator's profits, respectively.
Tier 3
If you are ready to turn a blind eye to the low purchasing power and LTV of potential customers in favour of high volumes of cheap traffic, then Tier 3 is your best choice.
Picking the Best Tiers for Gambling and Betting Products
You can target a country of any tier to promote iGaming offers. However, most marketers favour Tier 1-2 as there are more people interested in gambling and, more importantly, able to pay for bets. However, sports/eSports betting is increasingly penetrating Tier-3 countries, while Tier One markets with their strict regulation and many involved players are better suited for gambling affiliates. So, if you have to choose between the three tiers, always consider the following factors:
· Your experience as an affiliate. If you are a novice marketer, try your hand at Tier 2-3 GEOs as the cost of error is much lower here.
· Financial ability. To succeed in Tier 1 markets, your starting advertising budget should be substantial.
· Local population preferences. While Australians and Canadians are famous fans of pokies (gambling machines), Indians prefer cricket (national sport), which opens up excellent opportunities for promoting betting offers.
· Peculiarities of local legislation regarding iGaming. Strict rules towards iGaming platforms and their advertising or a complete ban on iGaming can significantly interfere with your marketing activities.
Keep in mind that the above figures regarding payments and salaries of marketers are approximate. Research each country in more detail as tiering is not always accurate.
Final Words
So, now you know that Tier 1 advertising and, for example, Tier 2 advertising can differ significantly due to different living standards in these countries. However, don't just focus on economic factors alone. For example, by looking at the Tier 2 countries list, you can find options that match your marketing goals and strategies. By taking into account the legal and cultural differences between countries, you will be able to implement more effective marketing campaigns to ensure your high profits.
FAQ
Why do marketers favour Tier 1 countries?
These countries are characterised by solvent audiences with a high level of trust in digital products. Despite the higher cost, advertising in these countries is more effective than in others.
Are Tier 2 countries a good choice for promoting iGaming products?
Due to the moderate competition and the constantly growing demand for gambling entertainment, marketers can make good profits by promoting gambling and betting offers in Tier 2 markets.
Is it worth investing in marketing Tier 4 countries?
Many marketers do not recommend promoting iGaming and other digital products in North Korea, Afghanistan and similar countries due to extremely underdeveloped marketing channels and very strict laws.
What is the best payment model for Tier 3?
Considering the cost, quality and volume of traffic, you're better off promoting offers under the CPL (Pay-per-lead) model.
Should you tailor your Tier 1 marketing campaign to Tier 2 countries?
While quality of traffic and personalisation are important for Tier 1, for Tier 2 your strategy should be hybrid with audience segmentation into more solvent and less solvent groups.