Cost Per Click(CPC) is an advertising system where an advertisier pays an agreed amount for each click generated on his site through a link or listing keyed to a specific search term With CPC you can place your ad on a search engine focusing on certain keyword phrases. You won’t be charged for simply displaying the ad, but will be charged every time a user clicks on those ads.
Cost per Action(CPA) advertising system works similarly to CPC. However, you only pay for your ad if the add converts and not every time your ad is clicked upon. A conversion can be anything that you determine ahead of time in the form of email newsletter signups, product purchase, etc.
CPC may tend to work well in terms of driving targeted traffic to your site and overall contribution to the sales. That’s because the ads are placed keeping in mind certain keyword phrases. While CPA tends to work well in terms of the overall revenue of the site as you only pay for sales conversions and not for every click on the ad.