The purpose of a traffic manager in cloud applications is to optimize and control the distribution of network traffic across multiple servers or resources. It enhances application availability and performance by directing users to the most efficient resource based on factors like geolocation and server load. Traffic managers help balance workloads, mitigate downtime during peak traffic periods, and improve overall user experience by ensuring fast response times. Moreover, they contribute to the scalability of cloud applications by dynamically managing traffic as demand fluctuates.