In digital advertising, advertisers frequently rank countries into tiers, depending upon the potential of that country to produce ad conversions (which translate to customers, sales, and ultimately profits) for the advertiser's business. Countries with the highest business potential are given the rank of Tier 1. Most advertisers recognize three tiers of countries: Tier 1, Tier 2, and Tier 3. However, some advertisers may utilize a fourth tier to add further granularity to their rankings.
Country tiers are both subjective and impermanent. Each source (typically marketing firms) has its own list of countries and tiers, and while these lists tend to follow the same general trends, differences between lists are also quite common. A country classified as Tier 1 by one source may be considered Tier 2 or Tier 3 by another source. Countries may also move up or down the tiers (either permanently or temporarily) depending upon political and economic developments including (but not limited to) wars, civil unrest, or trade embargoes.
|Country||Tier 1 frequency||Country||Tier 1 frequency|
|Australia||Every source||Luxembourgs||Many sources|
|Austria||Many sources||Netherlands||Many sources|
|Belgium||Many sources||New Zealand||Most sources|
|Canada||Every source||Norway||Many sources|
|Czech Republic||Some sources||Poland||Some sources|
|Denmark||Many sources||Portugal||Some sources|
|Finland||Many sources||Slovenia||Some sources|
|France||Most sources||Spain||Many sources|
|Germany||Most sources||Sweden||Many sources|
|Iceland||Some sources||Switzerland||Many sources|
|Ireland||Many sources||United Kingdom||Every source|
|Italy||Most sources||United States||Every source|
In most cases, Tier 1 countries produce the most sought-after type of traffic, which makes them the highest-priority targets for advertisers. Tier 1 countries tend to be among the world's wealthiest countries, with healthy, highly developed, mature economies resulting in a high national income and a high GNI per capita. As a result, the residents of Tier 1 countries earn high average salaries and possess ample disposable income. This gives them what some marketers call "high acquisitional power" and makes them ideal potential customers to advertisers.
The number of high-income residents in a country—and the language they speak—is also important. Countries such as Monaco and Liechtenstein rank among the wealthiest countries in Eruope and the world in terms of income per capita. However, they also have two of the world's smallest populations and their primary languages are French and German respectively. As such, an English-speaking advertiser may find few potential customers in these countries and therefore classify them as Tier 2 or Tier 3 instead of Tier 1.
Tier 1 countries also come with unique business challenges. Tier 1 countries tend to be highly competitive business markets, so the field of rival advertisers may be more crowded. The competition in Tier 1 countries also gives them a higher cost per click (CPC)—a term used to describe the cost to the advertiser of acquiring a user interaction, which is typically initiated by the user "clicking" on an online ad—than countries in other tiers. Tier 1 countries may also have stricter advertising guidelines to navigate.
Tier 2 countries have high- or middle-income economies that are either smaller or less wealthy than those of Tier 1 countries, but which are still either already healthy and mature or developing in the right direction, and so have strong potential for business. The residents of Tier 2 countries may have less disposable income on average, so profit margins may be lower and there will be fewer customers with both true intent and the legitimate wherewithal to do business. Customers are also less likely to speak English, so advertisers whose primary markets are English-speaking may need to budget for translation services.
On the other hand, the markets in Tier 2 countries usually have reduced competition and less-demanding consumers, which makes potential customers easier to convert into paying customers. Tier 2 countries tend to have fewer advertising regulations, and overall cost-per-click (CPC) for online advertising is lower than in Tier 1 countries, so advertisers can implement ad campaigns more easily and affordably.
The vast majority of Tier 3 countries are low-income and developing (or least-developed)countries whose economies are weaker, but can still provide significant opportunities for the right product in the right marketer's hands. Residents of Tier 3 countries tend to have low salaries and little disposable income. As a result, fewer products will be a good fit for the market, and connecting with potential customers may require more knowledge of the specific national culture and market than would be needed in Tier 1 or Tier 2 countries. Customer conversion rates and the profits from those conversions may be dauntingly low. However, Tier 3 countries also have the most affordable ad rates, the fewest advertising restrictions, and the lowest likelihood of competitions in the market.
A very rarely used tier. While most marketers utilize a three-tiered system in which any country that is not Tier 1 or 2 automatically falls into a catch-all Tier 3, some marketers add this fourth tier. Tier 4 countries are usually those whose economies have completely collapsed due to political strife or severe financial mismanagement, or which are under international sanctions that restrict the business opportunities with those countries.
With more than 26 million residents as of 2023, Australia is the most populous country in Oceania and the 55th-most populous country in the world. However, it consistently ranks in the top 15 for Gross Domestic Product (GDP) and median annual income, indicators of Australia's higher-than-average wealth. Although Australia has one of the lowest population densities of any country in the world, it nonetheless has five cities with over a million people: Sydney (the most populous), Melbourne, Canberra, Brisbane, Perth, & Adelaide. Like most Tier 1 countries, Australia scores quite high on the Human Development Index as well.
Austria is located in Central Europe and has a population of approximately 8.9 million people. Austria's 2021 GDP per capita was $53,638 (USD), one of the twenty highest in the world. Additionally, Austria's GNI per capita was $52,210 (USD). Austria's largest city, Vienna, has a metropolitan population of nearly 2.9 million people and a population density of roughly 4,300 people per square kilometer.
The Western European country Belgium ended 2022 with a population of nearly 11.7 million people and a population density of 386 people per square kilometer. A full 10% of Belgium's residents (1.2 million) live in Brussels, a city made up of 19 smaller municipalities including the confusingly named City of Brussels (pop. 189,000), which is Belgium's capital. Population density in Brussels rises to 7,500/km2. Belgium's GDP was $594 billion in 2021, and its Gross National Income (GNI) per Capita was $50,510 (USD).
Canada is the second-largest country in the world in terms of land area and approximately the 37th-largest by population, with 38.6 million people as of late 2022. Canada's GDP was the ninth-highest globally in 2021 at $1.83 trillion, and its GNI per capita landed at $48,310. It has been found that most Canadians live near the border to the United States due to trade opportunities and the severity of the winter weather in the country's northern regions. The most populous city in Canada is Toronto, Ontario, which has a population of 2.8 million people (6.2 in the greater metropolitan area). Canada has one of the lowest population densities in the world, with just four people per square kilometer.
Denmark is located in Northern Europe and had a population of nearly 5.9 million in early 2023. Denmark is an urban country, as 88% of the population lives in or around metropolitan areas. Denmark's largest city is Copenhagen, and it has a metropolitan population of 2.1 million and an urban population of 1.36 million. Denmark's 2021 GDP reached $398.3 billion (USD) and its GNI per capita is $68,110.
Another country in Northern Europe, Finland has a population of 5.5 million and a population density of just 18 people per square kilometer. 85% of people in Finland live in or around a major city. Helsinki is the most populated city in Finland, with 658,000 people residing in the city proper and 1.5 million in its greater metropolitan area. Finland's 2021 GDP reached $297.3 billion, and its GNI per capita reached $53,660.
France (and its overseas territories) had a population of 64.7 million as of early 2023, giving it a population density of 118 people per square kilometer and making the collective France the 23rd most populous country in the world. Paris is both the country's capital and its largest city, with a population of approximately 2.17 million people (13 million in the greater metropolitan area) and a density of 21,000 people per square kilometer (690/km² metropolitan). France's 2021 GDP of $2.96 trillion was the seventh-highest globally. The French have an average GNI of $43,880.
Germany is the largest and most populous country in the European Union (though not in Europe as a whole), boasting more than 83.3 million residents and a population density of 238/km² as of early 2023. The cities in Germany with the largest populations are Berlin, Hamburg, Munich, and Cologne, each of which has a population of more than one million people. Germany's 2021 GDP of $4.26 trillion was the fourth-highest globally, and its GNI per capita is approximately $51,040.
Ireland has a population of 5 million people as of early 2023, leading to a population density of 73 people per square kilometer. The largest city is Dublin, with a population of 588,000 in the city proper and nearly 2.1 million in its extended area. Ireland posted the 20th-highest GDP in the world in 2021 at $504 billion USD, and its GNI per capita is $74,520.
The United Nations estimates that Italy's population was 58.9 million at the start of 2023, with a density of 199/km². Italy is the sixth-most populous country in Europe (behind Russia, Turkey, Germany, the UK, and France) and the 25th-most populous in the world. The Po Valley is the most densely populated region in Italy and is home to more than half of the country's population. Italy's GDP is $2.10 trillion USD, and its GNI per capita is $35,710. The largest city in Italy is Rome, which has a population of 2.86 million people (4.34 metropolitan). Rome also has the distinction of completely surrounding Vatican City, the smallest country in Europe and the world.
Luxembourg is one of the smallest countries in the world, with a population of approximately 652,000 people at the start of 2023. Luxembourg is also densely populated, with 254/km². The country's largest city is also called Luxembourg and has a population of roughly 125,000, nearly a fifth of the country's total. Luxembourg's GDP was the 71st-highest in 2021 at $85.5 billion, but its GDP per capita was $188,001 USD, the highest in the world.
The Netherlands had a population of 17.6 million at the end of 2022, along with a population density of 523/km². The country's capital is Amsterdam, which is itself part of Randstad, a massive conurbation that combines the country's four largest cities—Amsterdam, Rotterdam, the Hague, and Utrecht—into a single connected urban area that is home to roughly 8.4 million people. The Netherlands had a 2021 GDP of $1.01 trillion USD and a GNI per capita of $56,370.
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 GNI per capita is $45,340.
The United Nations estimated the population of Norway to be 5.46 million at the start of 2023. Norway 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 702,000 living in the city limits and nearly 1.6 million in the greater metropolitan area. Norway's 2021 GDP was $482 billion, good for 29th in the world, but its GNI per capita of $84,090 was the third-highest in the world.
Spain has a population of 47.54 million and density of 95/km² at the start of 2023. It is the 30th-most populous country in the world and had the 14th-highest 2021 GDP at $1.43 trillion. Madrid, the largest city in Spain, has a population of 3.2 million in the city proper and 6.8 million in its metropolitan area. As in many countries, the rural areas of Spain are sparsely populated, while the cities have higher concentrations of residents. Spain's GNI per capita is $29,740.
Sweden had a population of 10.58 million at the start of 2023, making it the 87th-most populous country in the world—and also the 22nd-wealthiest country, with a 2021 GDP of approximately $636 billion. Its GNI per capita is $58,890. The largest city in Sweden is Stockholm, which also happens to be the capital. The population in Stockholm is estimated to be 978,000 in the city proper and 2.4 million in its metro area.
Switzerland had a population of 8.77 million people at the start of 2023, making it the 101st-most populous country in the world. Zürich is Switzerland's largest city, home to about 415,000 in its municipality and approximately 1.8 million in its metropolitan area. Zürich is one of the world's most competitive financial centers. Switzerland's 2021 GDP reached $800.6 billion, making it the 20th-highest globally and one of Europe's richest countries, and its GNI per capita was the second-highest at $90,360. Switzerland is widely considered to be a tax haven country, which contributes to its GDP.
The United Kingdom is made up of four nations: Wales, Scotland, England, and Northern Ireland. With a population of 67.63 million at the start of 2023, the UK is the 21st-largest country by population and continues to grow at a rate of approximately .61% every year. London, England is the capital of the United Kingdom and has a population of 8.8 million, which expands to 14.26 million when including the metropolitan area. The UK's 2021 GDP was the sixth-highest in the world at $3.13 trillion (USD), and the country has a GNI per capita of $45,380.
The United States has the highest population of any Tier 1 country (and the third-largest in the world), with 339.13 million people at the start of 2023. The state of California has the highest population of any state in the US, with 39.2 million legal residents, but the country's most populous city is New York City, with approximately 8.4 million people (20.1 million metropolitan) and a density of 2,309.2/km2. The US has the highest GDP in the world at $23.3 trillion USD (2021) and a seventh-best GNI per capita of $70,430.
|Bosnia and Herzegovina||2||3||2||2||3|
|Republic of the Congo||3||3||3||3||3|
|Trinidad and Tobago||3||3||3||3||3|
|United Arab Emirates||2||3||2||2||2|
Tier 1 is a classification given to countries that have the most potential for business success. They are often wealthy countries that are developed and mature.