Battle for the GEO. How do we simplify our advertising budget?

If a few years ago many teams focused only on potential traffic volume or regional popularity, today that is no longer enough. Traffic costs are rising, competition among advertisers is intensifying, and a mistake in budget forecasting can easily kill a campaign before it receives enough data for analysis. So how do you choose a GEO and forecast budgets? All of this is covered in the material from Big Traff Partners. 

Why Budget Forecasting Is Even More Important Than Choosing the GEO Itself

Many media buyers choose a country based on the experience of other teams or current trends. The approach of going to "Google what's trending" no longer works. As things stand, even a promising market can turn out to be unprofitable if the test budget was calculated incorrectly.

The economics of traffic are formed as follows: 

• The cost of impressions/clicks in the advertising system. 
• The level of competition in the auction. 
• User behavior.
• The purchasing power of the audience. 

If one of these parameters is underestimated, a campaign test may end before statistically significant results are obtained.

Therefore, cost forecasting is not just an assessment of CPM or CPC. It is an understanding of how much traffic needs to be purchased to obtain a sufficient number of clicks, registrations, and first deposits for campaign analysis.

What Factors Most Influence the Cost of Traffic?

The real cost of traffic in a specific GEO consists of several layers. 

1. Competition in the advertising auction. The more advertisers operating in a region, the more expensive each impression or click becomes. This is quite logical. That is why Tier-1 countries, such as the United Kingdom or Germany, traditionally have significantly higher traffic costs.
2. Audience purchasing power. Markets with high income levels are more expensive to enter, but they are capable of delivering greater LTV over time. In such countries, media buying requires a larger test budget, but a successful campaign will be more profitable in the long run. 
3. Market regulation. European GEOs have clear advertising rules that affect campaign moderation and permitted advertising formats. On one hand, this increases the cost of entry, while on the other, it creates a more predictable competitive ecosystem.
4. Traffic format and creative strategy. The same GEO can demonstrate different economics depending on whether video creatives, UGC formats, or classic banners are used. In modern advertising platform algorithms, creatives affect the cost of impressions and campaign effectiveness.

How GEO Economics Differ Depending on Tier

To understand the logic of budget forecasting, it is worth comparing different types of markets. 

So let's break down 3 key types of markets for you. 

Tier-1 GEO – countries with high purchasing power and high competition. These include the United Kingdom, Germany, the USA, and Australia. In such regions, traffic costs are significantly higher than in other countries. This means that a large budget is required to test a campaign, but the potential value of a player can also be significantly higher. In these countries, the advertising auction is considerably more competitive.

In 2026, the average CPM on Meta for such markets is often in the range of $15–$30, and CPC in the gambling vertical can reach $1.5–$3 per click. This means that to obtain 3,000 clicks, the test budget may amount to $4,500–$9,000. 

In the United Kingdom or Germany, the average user deposit can be several times higher than in most Asian GEOs, so a successful campaign will perform more profitably.

Tier-2 GEO combines relatively affordable traffic with a purchasing-power audience. For example, Spain, Italy, and some countries in Southeast Asia. For many teams, these markets become the optimal entry point. The cost of testing is lower than in Tier-1, but monetization opportunities remain high. Tier-2 markets often become the primary working zone for many media buying teams that have a decent starting budget and experience.

In such countries, CPM on social networks is usually in the range of $5–$12, and CPC often fluctuates between $0.40–$1.20. Taking an average CPC of around $0.70, a test of 3,000 clicks would require approximately $2,100.

That is why Tier-2 GEOs are often considered the optimal balance between entry cost and monetization potential. The cost of testing is lower than in Tier-1, but the audience's purchasing power remains sufficient for stable profitability.

Tier-3 GEO. These are characterized by cheap traffic but a more complex overall conversion economy. This category often includes India, Vietnam, Pakistan, or Bangladesh. Entry into such markets is cheap, but low purchasing power and a longer path to deposit significantly complicate overall profitability.

In such countries, CPM can be $1–$4, and CPC sometimes drops to $0.05–$0.20. At first glance, this looks very attractive. If the average CPC is $0.15, then a test of 3,000 clicks will cost approximately $450.

But here we encounter another problem – traffic monetization. In Tier-3 GEOs:

• Lower audience purchasing power.
• More complex conversion to deposit.
• Longer payback cycle.

Using Tier-3 as an example, it is often clear that cheap traffic does not always mean a cheap economy. Due to such instability among players, a test in a Tier-3 country may require even more time and resources than in a more expensive market.

Forecasting GEO Test Costs

Testing a GEO begins with assessing the minimum traffic volume needed to analyze a campaign. The first thing a team does is determine how many clicks are needed to evaluate CTR, registration conversion, and first deposit.

This volume is then multiplied by the average cost per click or thousand impressions in a specific region. In Tier-1 markets, the test budget can be several times higher than in Tier-2 or Tier-3, since the initial testing phase requires significantly greater traffic expenditure (as described above).

Any traffic cost forecast begins with an analysis of the advertising funnel. To assess the viability of a campaign, most teams need to obtain approximately:

• 2,000–5,000 clicks.
• 100–200 registrations.
• 20–40 first deposits.

This is the minimum volume of data that allows conversions to be evaluated and a decision to be made regarding scaling. The test budget in such a model is calculated quite simply. As an example, let's take the following metrics: the average CPM in the GEO is $10, and the creative CTR is 2%. We get the following: 

• 1,000 impressions = $10
• 20 clicks = $10
• CPC ≈ $0.50

If 3,000 clicks are needed for the test, the budget will be approximately 3,000 × $0.50 = $1,500. But keep in mind that this figure changes depending on the type of GEO. 

We provided these figures for illustrative purposes. 

Costs That Are Most Often Underestimated

One of the main mistakes during planning is focusing only on the cost per click or impression. In reality, the costs of launching a campaign are much broader. They include:

• Testing multiple creatives.
• Relaunching campaigns after bans (yes, this also needs to be accounted for).
• Advertising account infrastructure.
• Landing page localization.
• The algorithm's learning period.

For example, if a team is testing 5–8 creative variants, the actual test budget can increase by 2–3 times. It is precisely because such costs were not accounted for that many campaigns are closed too early.

How to Understand That a GEO Is Too Expensive

There are several basic signals that the chosen region is too expensive for the current traffic model:

• CPM significantly exceeds the forecast.
• CTR does not compensate for the high traffic cost at all.
• Deposit conversion is lower than expected.
• The test budget runs out before statistics are obtained.

In such a situation, teams often change the GEO or switch to a different traffic format. Keep in mind that the first days of a campaign have unstable performance, and without a sufficient budget, a team may stop a promising campaign too early.

Conclusion

Media buying is increasingly resembling a strategic game where the winner is not the one who launches ads faster, but the one who more accurately forecasts traffic economics. Choosing a GEO is a comprehensive analysis of competition, audience purchasing power, the regulatory environment, and the cost of testing.