Question

Why is it important for us to understand the difference between cost per click and cost per action?

Answer 1

Cost per Click (CPC) is advertisers only pay whenever if their ad gets clicked on.
Cost Per Action (CPA) is advertisers only pay whenever if their ad gets clicked on and converted into some sort of goal like signing up for a free trial of a product, registering for a free download, or buying your product, users will be paid at agreed rate. CPA generally involves less risk for advertisers than other advertising techniques as it is paid only when it is converted so it protects advertisers from potential eyeballs that won’t convert, as well as click fraud While in Case of CPC advertiser has to pay as soon as somebody clicked on irrespective of advertisement converted into some predetermined goals , it would put pressure on advertiser without achieving any targets.