Explain the difference between CPC and CPA bidding strategies.

• A. They are the same.
• B. CPC charges per click; CPA aims for a target cost per acquisition; choose based on optimization goal and measurement reliability.
• C. CPC is cost per order; CPA is cost per impression.
• D. CPA cares about clicks not conversions.

Answer: (B)

The key idea is how the ad spend is allocated and what outcome the bidding is optimizing for. In CPC bidding you pay for each click your ad receives, so the focus is on driving traffic and clicks. In CPA bidding, you set a target cost per acquisition and the system aims to achieve that cost by optimizing for conversions (sales, sign-ups, etc.). This relies on reliable conversion tracking because the algorithm learns which clicks are most likely to convert and adjusts bids accordingly to hit the target cost.

This is why the option describing CPC as cost per click and CPA as cost per acquisition, with guidance to choose based on your optimization goal and how reliably you can measure conversions, is the best fit. It’s not about paying per order or per impression, and CPA isn’t about clicks alone—it's about conversions.