Campaigns in higher tiers will be served first, before campaigns in lower tiers are served. Tiers are like levels, starting at the highest level first while waterfalling down. It will give you control over guaranteed deliveries.
For example, you run an important campaign that has to deliver 30 million impressions before the end of the month. Since other items are competing for exposure as well, you want to set the tier as high as possible.
When an ad request comes in, the ad serving engines will first check and see if a campaign in the highest tier is available. If so, that campaign will be served and "override" campaigns in lower tiers.
Not really. There are many reasons why a higher-tier campaign is not eligible for display. Think about targeting, frequency capping, dayparting or pacing. In that case, the engines will simply run down the waterfall until it finds a campaign that is available.
A classical scenario: direct deals from high-paying advertisers are set to the highest tier so that every ad request will try to serve those campaigns. If these campaigns cannot serve, a standard AdSense campaign from tier 1 will be shown.
Imagine you have a campaign targeted to mobile users from France and Italy in tier 2. An untargeted campaign from an ad network has been added to tier 1. In this case, all of your mobile traffic from France and Italy will go to the first campaign, while the 'remaining' traffic will go to the second.
By default, your ad server is configured with 3 tiers. You can create up to 10 different tiers via the page Settings arrow_forward Global Settings arrow_forward Defaults.