Cap

Cap is a limit that defines the number of leads an affiliate can attract to a particular offer. For example, you can find offers with a cap of 100 leads per day.

Let’s define caps definition and why it is used in affiliate marketing.

Cap Meaning

Caps are restrictions or limitations set by advertisers or affiliate networks on the amount of commission or earnings an affiliate can earn within a specific period or for a particular offer.

Capping works as follows: 

• The description of your chosen offer specifies that there are no more than 3 conversions per referred customer;
• The user comes to the site, landing or prelanding on the affiliate link, registers and thus becomes a customer;
• The user makes three successful payments. Your affiliate earns a commission from all three payments;
• After the affiliate earns the third commission, the customer becomes irrelevant;
• When the user makes a fourth payment, no commission will be earned by the affiliate. 

It’s important for affiliates to be aware of these caps and understand their implications to effectively plan their promotional strategies and manage their earnings.

Examples of Offers with Cap

In order to understand what is Cap, we suggest you have a look at the Yellana offers as an example.

Types of Cap

These caps are often put in place to manage budgets, prevent fraud, or maintain profitability for the advertiser. They can be applied in various ways:

• Conversion Caps: This type of cap limits the number of conversions or actions that will be credited to an affiliate within a given time frame. For example, an affiliate may be allowed to earn a commission for a maximum of 100 sales per day or 500 sales per month;
  
  
• Revenue Caps: Revenue caps restrict the total amount of commission an affiliate can earn from a particular offer. Once the cap is reached, any additional sales or earnings generated by the affiliate will not be credited or compensated;
  
  
• Time Caps: Time caps limit the duration for which an affiliate can earn commissions on a specific offer. For instance, an affiliate might be allowed to promote a product and earn commissions for the first three months after the launch, after which the offer will no longer be valid for commissions.

Why Do Advertisers Impose Cap?

Offer caps play a significant role in attracting high-quality leads, preventing excessive expenditure, and avoiding exhaustion. Look through several reasons to use it:

1. With the help of caps advertisers maintain their budgets. Implementing an efficient offer cap management system enables them to establish predetermined budget limits and closely monitor daily expenses. This ensures that advertisers adhere to their budgetary constraints and avoid overspending on leads that may not yield profitability;
   
   

2. Advertisers can check that leads meet specific criteria and are more likely to convert into paying customers. This approach enhances the probability of acquiring high-quality leads while making the most of limited resources;
   
   

3. This approach allows advertisers to effectively reduce the risk of fraudulent activities and maintain profitability as well as security. Nevertheless, it is important to strike a balance with the number of caps. Having too few or no caps can be equally detrimental as having an excessive amount.

We recommend continuously monitoring the performance of affiliate offer’s promotion to assess whether an offer is generating an excessive number of conversions as a result of fraudulent activities rather than legitimate customer engagement.

Related articles:

• Top 10 CPA Networks for Advertisers;
• Baseline;
• What is a CPA Offer in Affiliate Marketing.