Why are T1 Countries harder to convert than T2, T3? (8)
Hi,
Very often i have the feeling that T1 Countries are harder to convert than T2 and T3 Countries. I often see that the payouts in T1 Countries such as Germany & NZ are very high compared to those in ZA, Malaysia, IN etc. - I suppose the leads in the T1 countries are more valueable than those from a T3 country, hence the higher payouts. But why exactly are the T1 countries harder to convert than any T2 or T3 Geo? And is this also the reason why the new people on STM get the suggestion of starting in a T2 or T3 Geo, because of the easier conversions? At what point would you start tackling T1 Geos?
Any insight on this would be very much appreciated!
best regards
It's basically a combination of several different factors like a (often) lower CTR, higher competition, higher traffic prices and others.
In T1 you have to compete with other affiliates, platforms and direct advertisers with much bigger cash flow, people who have campaigns running there for long time already, people with very good optimized BLs and WLs who can afford to pay much more for the real good placements.
You won't have such a hard competition in lower Tiers or for traffic segments and targeting that are not attractive enough for the real big players.
Playing with the big boys often also means playing by different rules.
In low Tier geos you can often run campaigns on much higher ROI compared to T1, but when you want to compete with the big players it's often not that much about running at high ROI.
There it's all about maximum profit.
That means running on as high volume as possible.
Then you have to accept to get (much) lower ROI because you need to run on competitive bids.
So when you can earn $300 revenue from $100 adspend in T3 you could have the situation to only earn $110 or $120 revenue from $100 adspend.
You can still make much more profit there because of good scaling options and good payouts but you need a much higher cashflow to run campaigns that way.
So you see, it's not necessarily because it's harder to convert.
It's rather a mix of different factors that makes it harder for beginners to run in T1 compared to lower Tiers.
Twinaxe has already covered pretty much everything.
One of the reasons why newbies are suggested to start with T2/T3 goes is also due to the limited budget they have. Not everyone joins affiliate marketing with huge budgets, so starting out with T2/T3 geos will allow them to get enough data to understand how AM works and master the needed skills.
As you may understand, it'd be hard to compete with someone who's promoting the same offer as a newbie is, when they're spending 3/4 figures a day or week, while the newbie has a 4 figure total budget for the next couple of months.
The direct advertisers of the offers can bid even more.
Then as a beginner you mostly have access only to public offers.
Other competitors also run private offers that are doing much better.
All this combined should be enough already to see why T2/3 is better for beginners but then in top you have a beginner with no or just small BLs/WLs vs competitors with highly effective lists that they collected through tens of thousands of conversions and maybe hundreds of thousands of dollars in adspend.
But @heikoo, before you get scared or so you should always keep in your mind that even the biggest affiliate had to start somewhere.
Just learn to walk before you run.
You will run into issues anyway and you will have to deal with fails, that's just normal and you can't really avoid it.
So try to have a good damage control to keep the losses low.
Hey Platinum & Twinaxe
Thanks for the answers, very easy to understand and it all makes much more sense now. Budget & Offer Payout really seem to be the biggest problems in those GEO's. Currently running 2 Push Campaigns in FR and both have a CR of 3 - 3.57 and a ROI of -60% ~ The offer is relatively new and i suppose more testing and blacklisting would get this one into green.
What i also noticed is that T1 Geos really seem to dislike Pops 
And to add to this, there is one more reason why it's a bit more complicated to run in tier-1 countries.
It's the saturation and user knowledge level plus regulation on top of that.
In developed countries like US, Germany, UK etc... users have been online for a while and they have seen all kinds of offers being promoted. They know that large part of the offers are at least a bit shady, so they are more hesitant to take part in "just another iphone draw".
A lot of high converting offers are converting that well because they break or circumvent some rule or law. Or they exploit the fact that there are no rules, yet. Which happens in lower tiers. It simlpy takes some time for the regulators to catch up with all the tricks. So while some of these tactics could still be allowed in lower Tiers, they are banned in Tier 1 countries.
Then there is the attractiveness of some offers... take the iphone sweeps as an example again... it's more tempting for a guy in Vietnam than someone from US, because chances are they could buy the iphone anyways, if they wanted.
And to conclude this, most users in Tier1 geos are already online, for a long time, while in less developed countries there is a ton of people who are yet to be connected. And naturally, those who just discovered the internet are more hungry and keen on trying EVERYTHING! It's very obvious in the app markets for example... I'm sure you were the same when you first got a smartphone, you would download any app that would look interesting ... but after a while, you have all the apps you need and do not install that many of them anymore.
Why are T1 Countries harder to convert than T2, T3?
At last. Payouts in lower tier countries are lower because, when talking pin submits for example, advertisers can only monetize a fraction of how much tier-1 advertisers can monetize, in absolute numbers.
Earning 0,10ct per sms / max 0,70ct a weeks vs charging people euros per week in tier-1 countries for example gives tier-1 advertisers more space to handout higher payouts. These sms rates are chosen & regulated by the local telco operators.
In tier 1 countries there are also more offers to add to the funnel to give it an ever higher payout (thank you pages with relevant offers etc).
I wanted to comment here, but everyone already answered everything, dammit!
TLDR: There are many factors why, but it all comes down to numbers. e.g. payout in DE is higher, not because it is harder to convert (same dude clicks on the same lander and enters his email), but because it is harder to convert (more saturation + more traffic + savvy internet users = way lower CTR == you gotta run more traffic === more $$$ on testing)
Plus everything that was said above 
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