Tier‑1 CPC Surge: Why Media Buyers Are Moving to Tier-2 and Tier‑3?
Tier-1 is pricey, and we all know that. However, lately, it has become so expensive that it no longer fits most budgets – especially on platforms like Google and Meta.
Is pushing your ad spend to the limit the only way out? Well, not really. Many advertisers are shifting their focus to Tier 2 and Tier 3, and it seems to be a big new trend.
We consulted with experts to determine: Does this shift actually make sense? And can Tier‑2/3 be the next sweet spot in 2025?
Does the CPC Surge Really Exist?
A quick answer is ‘Yes, it does’. Here are some stats:
- According to a 2025 benchmark report, 87% of industries saw CPC increases – with sectors like Beauty & Personal Care up +60.11%, and Education & Instruction up +41.91%.
- Another analysis shows the average CPC on Google Ads hit about $5.26 in 2025.
- Over the period 2022–2025, some businesses reported CPC increases of 50-100%.
Articles and dry stats are one thing, but here’s what real media buyers told us directly.
Gadel Zagirov, media buyer and a Telegram Channel owner:
In most Tier-1 markets (US, CA, UK, DE, AU), CPC and CPA rates in Meta and Google have gone up. The change is especially visible in iGaming, where strict moderation and narrow targeting make traffic more expensive. On average, CPC grew by 15-25%. We see the biggest jump in ‘cold’ Meta campaigns and Google search ads for popular iGaming keywords.
Alexandra Emelianova, Senior PPC Specialist: Yes, CPC growth is significant, especially in the US and the UK. In some campaigns, CPC has increased by 50-100%. It’s a noticeable change that affects the overall efficiency of ad budgets.
So what’s going on? Tier 1 CPC has always been pricey, but the recent surge stands out. There are a few reasons behind it.
- The primary factor is the use of automation tools that adjust bids and budgets to achieve conversion goals. Smart strategies by Google Ads, like Performance Max, Target ROAS, and Target CPA, often pull bids and budgets up to reach the set conversion goals.
Quick note from Gadel: Meta’s Advantage+ can also automatically drain more of the budget if you don’t keep an eye on it.
- Tier-1 keeps attracting more and more large advertisers, and their competition is growing and heating up the auctions. It’s most evident in Google Search, where everyone bids on brand keywords.
- Advertisers, in turn, are also more willing to spend today, and it makes the competition even stronger.
As a result, CPC itself becomes less important, but overall, the cost per click still goes up.
How to Optimize Your Budgets?
As Gadel puts it, if you really need to stay in Tier-1, the only way to cut costs is a systematic approach. It involves checking how much you spend to acquire a user (CAC) and how much that user generates in revenue (LTV) for every partner offer you run.
If the numbers don’t add up (for example, you spend $10 per user but earn only $8 from them), you need to quickly move your budget to another offer that performs better.
Still, the main advice is simple: watch your ad quality. Alexandra shared a few tips:
- Add more variety to your ad copy and test new creatives regularly. If you use the same ad version for too long, it burns out.
- Keep analyzing performance by GEO, targeting, and keywords. For example, find the regions where you pay too much per click, but get no conversions – and reallocate your budget accordingly.
- Experiment with bidding strategies: if your current CPC or CPA isn’t working well, try alternative settings. In reality, you never know which combination performs best – that’s why you need to be flexible and never skip testing.
Gadel:
The main point is that it’s getting harder to make traffic pay off from the very first click. That’s why the focus is shifting toward building full funnels and developing your own audience base.
This approach allows you to monetize users repeatedly and increase their LTV through return visits. So, your own audience is a real, valuable business asset that grows steadily, no matter how traffic prices fluctuate. In other words, the strategy is moving from just sending traffic to offers to building an ecosystem.
But what if you don’t want to fight for cheaper clicks in Tier-1? There’s another way: you can explore other tiers. It can be a full shift to Tier-2 and 3 markets or at least your new testing ground.
Switching to Tier 2 and Tier 3: Will It Help?
Many marketers are already exploring alternative GEOs. For example, here is Gadel’s experience:
Gadel:
We’re already running and scaling campaigns there. Our key priorities are BR, MX, CO, PL, RO, PH, TH, ZA, and NG. The main advantage is cheaper traffic; the downsides are localization, local payment systems, and KYC. To stay profitable, we keep separate unit economics for each GEO.
If you’re also thinking about trying new markets, here’s a quick breakdown.
Is there a real CPC difference?
As Alexandra shared, Tier‑1 CPC is usually 2 to 5 times higher, depending on the niche, vertical, and ad format. Tier‑2 CPC and Tier‑3 CPC can be 50-100% cheaper, so it’s a significant cost gap that opens up real opportunities to optimize your ROI.
And here’s a comparison table we put together using data from multiple sources:
| Tier | Countries | Average CPC |
| Tier 1 CPC | United States, Australia, United Kingdom, Canada, Germany, Iceland, Luxembourg | $0.45 – $0.85 |
| Tier 2 CPC | Japan, Sweden, Mexico, Brazil, Thailand, Malaysia, Philippines | $0.10 – $0.50 |
| Tier 3 CPC | India, Pakistan, Colombia, Vietnam, Kenya, Bangladesh | $0.03 – $0.25 |
Alexandra:
Some of the most promising directions include Singapore, Thailand, Malaysia, Vietnam, Indonesia, and even Pakistan. Overall, it all depends on the specific project. These countries can deliver high-quality traffic, with conversion rates that can be even better than those in Tier‑1 markets.
What are Tier-2 and Tier-3 advantages?
Besides the cheaper traffic, there are some more reasons to choose Tier-2 and Tier-3 over the posh and premium Tier-1:
- More flexibility: you can start with smaller budgets, test your ideas, and then safely scale what works.
- Less competition: especially in non-English GEOs and smaller niche verticals.
- Higher ROI when done right: if your offer is localized and a product is easy to get, profits can grow fast.
- Perfect for testing: Tier-2/3 markets are great for trying new campaigns before going big in Tier-1 – yes, again, because Tier 2 and Tier 3 CPC is lower.
- Fair CPCs: On platforms with strong Tier-2/3 traffic, such as PropellerAds, smart bidding doesn’t push CPCs up. You never pay more than your target price.
Alexandra:
If the offer isn’t positioned as premium and the region is a good match, Tier‑2 and Tier‑3 can be just as effective as Tier‑1 – or even better.
What are the strategies for Tier 2 and Tier 3?
One key to success in new markets is localizing your creatives: adapting them to the local language, culture, and user behavior. It’s a simple tip, but it works for every strategy we’ll cover below.
Here’s one example: a Finance vertical creative aimed at the U.S. users.
And this is how the Finance vertical can be promoted in Brazil:
See the difference? Now, to the strategies: there are three simple options you can try out.
Strategy 1: Test in Tier 1, scale in Tier 2/3
Here is a classic approach: you can make sure your creatives and funnels work in markets where traffic is high-quality and behavior is predictable, and then scale what works in cheaper GEOs. Don’t forget the audiences in various GEOs don’t think or behave the same way, though:
Gadel:
Player psychology in Tier‑1 and Tier‑2/3 markets is quite different, that’s why the ‘test in expensive – scale in cheaper’ approach only works if you adapt it. Tier‑1 players care more about trust, branding, and clear terms. Tier‑2/3 players respond better to bold offers and instant rewards: they’re more motivated by immediate visible value.
Strategy 2: Vice-versa
Another option is to begin with Tier 3, where clicks are the cheapest. With a minimum budget, you can collect data quickly and then refine your creatives for Tier 2 or Tier 1. So, you enter the market with a setup that has already been tested and optimized.
Strategy 3: Parallel launch
Instead of scaling step-by-step, some teams opt to launch campaigns simultaneously in Tier 1 and Tier 2/3 GEOs.
The logic is simple: you use the same funnel or product, but try different creatives, messaging, and positioning, adjusted to each region’s mindset.
To Sum Up
It looks like shifting to Tier 2 and Tier 3 isn’t just a temporary move: it’s becoming a trend.
Tier‑1 markets keep getting more expensive, and, as Alexandra puts it, the results don’t always match the costs.
Meanwhile, Tier‑2 and Tier‑3 continue to show a nice conversion volume and positive ROI with lower spend. So, if you feel it’s your backup plan or a brand-new strategy, you are welcome to get top-quality Tier-2 and Tier-3 traffic at PropellerAds.
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