Understand Why Advertisers are Capping Your Mobile Campaigns! (6)
Understand Why Advertisers are Capping Your Mobile Campaigns!
Capping… This word doesn’t have one singular, single meaning in the affiliate marketing business.
Indeed, when media buyers read this word, their mind automatically flies to this definition: capping is the number of views a specific IP user will see your ads within a specific period e.g. if I set a capping of 2/24h, users won’t see my banner more than two times for every 24 hours.
This article will focus on the definition of capping that’s associated to advertisers.
[Disclaimer: This post was originally published on Mobidea Academy. All the missing information can be found in the full version.]
This isn’t a cap for the number of times an ad is displayed but a cap for the number of conversions a campaign can have.
When applying for an offer in an affiliate network, you may often find something such as leads: 50.
What does this mean?
Is this capping for you only, or for all the affiliates that are promoting this offer combined? Are we talking about something that’s per day, per month, per total campaign running time? How can you know this? Why does this happen?
Why do advertisers choose capping?
Advertisers often let their campaigns run with no limits. You can send as much traffic as you’d like, delivering an unlimited number of leads.
Nonetheless – like in everything in life – not all advertisers have the same strategy. Some opt to restrict the number of conversions their campaigns can have. This can be done for several reasons:
#1 Controlling the number of leads
Advertisers can use this method to control the number of leads their system is able to register.
When a new company breaks into the mobile advertising ecosystem, they often aren’t 100% familiar with how the industry works. To test the waters, their budget is usually lower and more controlled.
This can also be due to their recently-created tracking systems. With less time for development, they aren’t usually ready to take on large numbers of conversions. This is one of the reasons why a cap is sometimes necessary.
#2 Controlling their budget
Are budget restrictions only applicable to market newbies?
Of course not!
Advertisers are companies. Like any company, they have costs and revenue. This ain’t no business 101 class, but it’s clear that costs can’t surpass revenue forever! Paying a commission to affiliate networks is a cost to the advertiser. The revenue comes from the user who subscribes to the service. The problem is that the user is paying the carrier.
The carrier will then take 90, 180 or even more days to pay the advertiser.
Meaning what?
That if the advertiser pays the network in, let’s say, 30 days and receives from the advertiser in 90 days, this means they’re paying the network in advance. For some, it can be tricky to always pay in advance. In fact, they may feel the need to control that amount of money. That can also lead to daily or monthly lead capping.
#3 Monitoring if they’re not overspending
Advertisers can use capping to monitor if they’re not overspending on a campaign that brings negative ROI.
Wondering what the heck is ROI? It’s one of those accounting acronyms. What can this possibly have to do with capping? It may be the reason why you’re unable to send more users to that top favorite offer of yours. Yes, indeed!
ROI stands for Return Over Investment.
The advertiser is investing a certain amount with their payouts to the advertisers. The advertiser is getting a given return over that investment. When they start a campaign, they don’t know if the dollars they’re spending on networks will ultimately result in highly-committed users.
Until they have enough data to determine the right amount of cash to spend, they may decide to establish a cap.
#4 Testing the traffic quality of some affiliates
Advertisers can also cap when they’re testing the traffic quality of some affiliates before making it available to them all. When an advertiser is launching a new product, they have no idea how it’ll perform across the different traffic sources. The fearless ones may decide to run them with no capping. However, the cautious ones will prefer to impose limits to the number of new users they’ll get.
In fact, they may want to test advertising with a reduced number of affiliates, only later deciding whether or not to make it available to other affiliates. Here, as previously explained, quality will be your best weapon. If you’re delivering high-quality leads, you may ask your AM if he can increase the cap for you.
In case he can’t do it, ask what the advertiser would like to see from your traffic.
This way, you can improve the quality of your traffic and be blessed with an increase in daily/monthly leads in the future!
Who’s this capping for? Is it daily, monthly?
Let’s take a look at this example:
Offer A has a capping of 50 leads/day. You’ve just sent 5 leads today but the offer has ceased to convert. You check with your account manager and he tells you the daily cap has been reached.
What?!
You’ve just sent 5 out of 50 possible leads. How’s it possible that the capping has been reached? 
The answer you’ll get from your AM is probably that the capping is for the network. This means that all of the network’s affiliates can deliver a total of 50 leads per day. You’ve delivered 5. Other affiliates promoting this offer have delivered 45. That’s 50. It’s that easy to get. The offer can’t convert anymore for the rest of the day.
Simple.
Let’s pretend you come across a campaign and notice it has a limited number of leads it can deliver. Most of the times, you won’t be able to find out whether these leads are to be delivered by you alone or by all affiliates of the network it’s being promoted on.
Before you start promoting, contact your Account Manager. They’ll give you all the info you need to know in order to prevent surprises like the one showcased in the example above.
Regarding the time frame of the capping: the most common are daily caps and monthly caps. Imagine the offer has a daily cap of 50 conversions. When it reaches that value, it’ll stop converting until the next day. Then, it’ll convert a maximum of 50 times until it stops converting again. Basically, it’ll convert a maximum of 50 times each day and then stop. Easy.
What about monthly caps?
The strategy is the same. The numbers are usually higher than on daily caps. With a monthly cap of 300, you’ll be able to send 300 conversions to that offer for a month. Whether you reach that cap in the 1st day of the month or towards the end, you won’t be able to send more leads until the end of the month. Once the next month starts, you can deliver 300 more leads.
Conclusion
You can find different types of capping across affiliate networks. Some are capped per user, per day, per platform capping…
In general, networks have algorithms which will dynamically decide these things in real time. This is how they manage to automatically split the leads across all affiliates. I hope this article has helped you understand why some offers have a limit of leads you can deliver.
Information isn’t always 100% available when applying to an offer! If you have any questions, don’t hesitate! Always contact your Account Manager!
Good article, thanks for posting. Caps can be confusing.
Do you think it's worth running offers that have caps or should they be avoided?
For example, I was looking at an offer with a $0.45 payout and a cap of 500 leads per day. That's limited to $225/day revenue before reducing the cost of adspend. I can't imagine this would ever be worth trying to test & refine because you'll never really be able to see solid numbers from an offer like this.
But could it be worthwhile to run a higher-paying offer like $50/lead with a similar cap?
Hey there!
First - are these 500 leads/day only for you or for the whole network? If it's per affiliate, it's not that much, although if for a network - think twice. How is the flow, what's the target, and depending on it - will the traffic be expensive for you? In the end your goal is as usual - make money if possible, so here you'd need to evaluate your possibilities and make a decision depending on that.
And second - of course, the higher payout - the better! But again, depends on all other factors. Just as usually, deciding if you should run the offer or not, take capping into consideration 
You forgot
5: Keeping the non-compliant billing offer open
A lot of mobile advertisers (especially in the carrier billing) use non-compliant billing flows, such as overlay auto-clicking, double optin removals, auto double optins, and such.
In order to keep these non-compliant flows active, they need to stay under the radar, otherwise the carrier steps in and kills the billing for a specific merchant
and / or after a certain amount of shit-iness the regulation for the whole country changes.
A prime example of this would be the US, which killed the premium sms billing entirely some years ago, and as of late we have an example in Germany, where the billing flow got much more regulated compared to previous years.
If you want to know why they cap you on their mobile campaigns, just put yourself in their shoes.
Apart from having budgets and wanting to see the ROI on your leads and installs, they mostly want to see your quality first and make sure you are not doing fraud.
If a publisher does credit card fraud, its a fairly easy outcome from an AM point of view. The pub won't get paid and the aff network neither ,end of story. For an advertiser, he's in really deep shit with his payment gateway provider, a lot of user complaints for unsolicited billing of their cards and if they're really unlucky it will come in the newspaper "booking.com credit card fraud scheme uncovered". As an affiliate you are mostly anonymous as in the end users point of view, its just a simple redirect - one of many. Even the network is quite shielded from the public eye. The advertiser isnt. So capping, especially of new affiliates, is their way of limiting their risk and like with anything in live, you gotta prove yourself a bit first before you get access to the real deal.
The other more obvious reason for capping is that an app install or a simple lead has ZERO value. Absolute zero. What has value to the advertiser is the amount of these installs and leads that will convert into sales. Thats the only moment they'll start making money. So imagine they would uncap you right from the start, you deliver 10,000 leads - not fake - and they'll pay you 2$ per lead (example). 3 months later, they only have 4 sales each one worth 500 euro (example) out of those after heavy followup/call center/etc. Apart from the staff cost of plowing through all those leads and following up on them (think mailchimp costs or call center costs) they made a lousy 2K and spend 20K. Apart from losing 18K, they invested probably over 50 manhours in your leads. The reason they cap you is obviously to limit their FINANCIAL risk but also to limit their TIME risk. every lead brings follow up work and data costs with it.
At the end of the day what has value to the advertiser, is a SALE. Not a lead or an install - thats worthless to them. You'll see very few advertisers working on CPS that give you a cap. If you really want unlimited cap right from the start go for CPS. If you are more patient, and especially have good quality traffic, you then can start with CPI/CPL
Side note/ a free trial with a CC submit is not a sale or a PIN SUBMIT is not a sale, thats all CPL where the advertiser only starts breaking even after a few rebills. If the user drops off/unsubscribes before that break even moment, they lose money. Back to square one about testing your quality and the very reason why they cap you.
So yes, if an advertiser or networks cap you - the best way to handle this, if you are a solid pub, show them what you have, deliver good traffic, bring good leads; They'll be increasing your cap really quickly and begging for more.
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