This depends on if you're doing live transcoding or VOD transcoding.

I work with live transcode, and it can be beneficial to run on g2 instances. Running c4.4xlarge I can transcode a good number of 1080@30 in with 1080/720/480/360/240@30 out. With a proper g2 instance I can transcode more simultaneously.

So cost efficiency really depends on sustained traffic levels. I scale out currently using haproxy and custom code that monitors my pool and scales appropriately. But I monitor sustained traffic levels to know when it makes financial sense to scale up.

If your main concern is transcode speed, CPU is likely sufficient -- I am unable to transcode faster than real time with live transcode.