What are Tier 1, Tier 2, and Tier 3 Countries?
In digital advertising, advertisers target specific demographics that are more valuable to their product or service. Advertisers will also target specific countries that are valuable to them than others.
Countries are ranked into tiers based on economic factors. Wealthier countries with higher incomes are most desirable to advertisers, while low-income countries are less desirable. This is because the wealthier countries are more likely to produce conversions, or sales, than the less-wealthy countries.
Advertisers recognize three tiers of countries: Tier 1, Tier 2, and Tier 3.
- Tier 1: The world's wealthiest countries with high salaries and disposable income. Tier 1 countries are also highly competitive and have high costs per click (CPCs), which is the cost of each click an advertising campaign gets. Generally, every marketer would like to work with these countries.
- Tier 2: These countries are less wealthy than Tier 1 countries and have less disposable income. Competition and CPCs are lower as well.
- Tier 3: Tier 3 countries are developing countries that are low-income. Residents have very low salaries and very little to no disposable income. These countries have very low competition since very few advertisers are running ads; however, they are the cheapest countries to advertise in.
Tier 1 Countries
Australia is the most populous country in Oceania, with a population of 25.20 million. It is the world's 55th-most populous country and has the world's 14th-highest GDP of $1.48 trillion. Australia's median annual income is $54,910, the 14th-highest in the world. It is estimated that there are only seven people per square mile in Australia. This country has five cities with over a million people, with Sydney being the most populous.
Austria is located in central Europe and has a population of 8.96 million people. It is the world's 97th-most populous country and 29th-wealthiest country, with a $481.68 billion GDP. Additionally, Austria's median income is the 15th-highest globally at $51,300. Vienna is the largest city in Austria and has a metropolitan population of 2.6 million. This city is densely populated, with over 4,000 people per square kilometer.
Belgium is located in western Europe and has a population of 11.54 million people. There are 975.6 people per square mile in Belgium. The capital of the country is Brussels, and 1.175 million people are living there. The number of people per square kilometer goes up in Brussels to 7,075. Belgium's GDP is $553.78 billion, and its median income is $47,350.
Canada is the second-largest country in the world and the 39-largest by population, with 37.41 million people. Canada's GDP is the tenth-highest globally at $1.83 trillion, and its median income is $46,370. It has been found that most Canadians live near the border to the United States due to weather and trade. The most populous city in Canada is Toronto, Ontario. Toronto has a population of 6 million people. Canada has one of the lowest population densities with just four people per square kilometer.
Denmark is located in Northern Europe and has a population of 5.77 million. It is an urban country with 88% of the population living in or around metropolitan areas. The largest city is Copenhagen, and it has a metropolitan population of 1.99 million and an urban population of 1.2 million. Denmark is the world's 39th-wealthiest country, with a GDP of $364.55 billion. Denmark's median income is $63,240.
Finland is located in northern Europe and has a population of 5.53 million. It has a low population density of just 39 people per square mile. 85% of people in Finland live in or around a major city. Helsinki is the most populated, with 625,000 people residing there. Finland's GDP is $289.24 billion, and its median income is $49,580.
France has a population of 65.13 million and has many overseas territories that contribute to the country's population. It ranks as the 22nd most populous country in the world. Paris is the largest city in France, as well as the capital. It has a population of 2.24 million and a density of 21,000 people per square kilometer. France's GDP of $2.78 trillion is the sixth-highest globally and has an average income of $42,400.
Germany ranks in at number two with an estimated population of 83.52 million. This makes Germany the largest and most populous country in the European Union. The cities in Germany with the largest populations are Berlin, Hamburg, Munich, and Cologne. Each city has a population of over one million people. Germany's GDP of $4.16 trillion is the fourth-highest globally, and its median income is $48,520.
Ireland has a population of 4.88 million based on recent U.N. projections. There are 147 people per square mile on the island. The largest city is Dublin, and it has a population of 1.9 million. Ireland is 122nd in the world for population density and 32nd for GDP, with a GDP of $405.19 billion. Ireland's median income is $62,210.
The United Nations estimates that Italy's population is 60.55 million. Italy is the fourth-most populous country in Europe and the 23rd-most populous in the world. The Po Valley is the most densely populated region in Italy, with half of the countries population living there. The largest city in Italy is Rome, which has a population of 2.8 million people. Italy's GDP is $2.07 trillion, and its median income is $34,460.
Luxembourg is one of the smallest countries in the world and has a population of 619,299 people. It is densely populated, with 537 people per square mile. Luxembourg has three cities with between 10,000 and 100,000 people living in them. The largest city is also called Luxembourg. Luxembourg's GDP is the 71st-highest at $73.69 billion, but its median income is the sixth-highest in the world at $73,910.
The Netherlands has a population of 17.10 million, making it the 62nd-most populous country in the world. Amsterdam is the capital of the Netherlands, and 7 million people are residing in the area. There are about 511.48 people per square kilometer (491 per square mile) living in the Netherlands. The Netherlands has a GDP of $954.93 billion and a median income of $53,200.
New Zealand has an estimated population of 4.78 million. It is believed there are 47 people per square mile on the island. New Zealand ranks 166th in the world for population density. The largest city is Auckland, with 1.45 million people living in the area. New Zealand's GDP ranks 52nd globally at $224.94 billion, and its median income is $42,670.
The United Nations estimates the population of Norway to be 5.38 million. It is an urban country with most of the population living in or around major cities. Oslo is the capital of Norway and has the highest concentration of people, with 580,000 living in the city limits. Norway's GDP is 31st globally at $438.62 billion. Its median income is the fifth-highest globally at $82,500.
Spain has a population of 46.74 million. It is the 30th-most populous country in the world and has the 13th-highest GDP of $1.50 trillion. It is calculated that this country has an average of 229 people per square mile. Madrid is the largest city in Spain and has a population of 6,155,116. The rural areas of Spain are sparsely populated, while the cities have higher concentrations of residents. Spain's median income is $30,390.
Sweden is the third-largest country in the European Union, with a population of 10.04 million. It is the 91st-most populous country in the world and the 23rd-wealthiest country, with a GDP of $576.72 billion. Its median income is $55,840. The largest city in Sweden is Stockholm, which also happens to be the capital. The population in Stockholm is estimated to be 2.35 million.
Switzerland has a population of 6.83 million people, making it the 100th-most populous country in the world and the 22nd-most populous country in Europe. Zürich is Switzerland's largest city, home to about 435,000 in its municipality and over 1.83 million in its metropolitan area. Zürich is one of the world's most competitive financial centers. Switzerland's GDP is $740.70 billion, the 20th-highest globally, and its median income is the fourth-highest at $85,500.
As of 2019, the United Kingdom has a population of 67.53 million people. The United Kingdom is split into four nations - Wales, Scotland, England, and Northern Ireland. It is the 21st-largest country by population and continues to grow at a rate of .61% every year. London is the capital of the United Kingdom and has a population of 8,136,000. The U.K.'s GDP is the fifth-highest in the world at $2.83 trillion and has a median annual income of $42,370.
The United States has the highest population of Tier 1 countries with 329.45 million people. It has the third-largest population in the world. California has the highest population, with 39.5 million people living there. The most populous city in the United States is New York City, with 8.4 million people. The U.S. has the highest GDP in the world at $22.2 trillion and a median annual income of $65,760.