Simulace.info - User contributions [en]

PPC systems, Ad Rank

2016-01-23T08:29:14Z

Lucie:

*'''The Essay topic''': How PPC systems work? How Google and Facebook ranks your ads?
*'''Class''':[http://isis.vse.cz/katalog/syllabus.pl?predmet=95726;zpet=..%2Fpracoviste%2Fpredmety.pl%3Fid%3D64%2Clang%3Dcz;jazyk=1;lang=sk 4IT496 System Simulation] (WS 2015/2016)
*'''Author''': Bc. Lucie Pokorná

= Introduction =
<div>
PPC systems and Ad Rank are closely connected topics because they have been created within the same time, share most of principles and serve to one common purpose – to attempt to bring more potential customers to a particular most usually commercially oriented website through paid advertising on other websites that are just being visited by targeted users. Thanks to a good Ad Rank, sponsored links are shown to users when it is calculated as relevant to be shown. In case of being clicked on, Pay-per-click system techniques come to play.
</div>

= PPC Systems =
<div>
Pay-per-click systems are marketing tools used exclusively for internet advertisement and stand for the idea of advertisers paying every time a user is attracted enough to click on the advertisement link that can be placed on dedicated sections of search engine result page after user input in a form of specific word or word combination or on any found as appropriate website that shows advertisements of other websites in order to create income for their owner.
</div>

<div>
Websites showing advertisement content have to be in a partnership with a provider of such services – particular sections of the websites are intentionally created and left blank for filling up with advertisement that the provider decides to place there. Suggestions of suitable advertisement are based on algorithms that are supposed to match certain advertisement with a certain web content so that a logical link between them is created. In other words, only in some way corresponding websites are paired to arrange as good click though rate for the advertiser as possible as well as highest possible earnings for the partnered website that provides an advertisement space.
</div>

<div>
The difference is that advertisements shown on a search engine result page are or should be customized for the query of a user and anticipate him to be more likely attracted as that link might be just the thing that they were looking for, whereas sponsored links on a website are not changed specifically for any of the website visitors and the likelihood of them clicking on such link is not that high - they may not be interested at all.
</div>

<div>
Advertisers pay partly to the owner of a website (in case the advertisements are shown there) and partly to an owner of a PPC system that was used. Search advertisement is one of the most popular advertisement on the internet.
</div>

<div>
This form of marketing can be called rather passive, because when the advertisements are well done – highly optimized with thought-through marketing strategy, using relevant only AdWords, made coherently and logically in general - not aggressively or targeting wrong user groups with too generic words – it is possible to then let the users make their decision whether to get interested or not and attract much more visitors to a website with no extra necessity to try to lure each one of them in a personalized matter. Unfortunately for advertisers, rules for making the optimal advertisement with a high enough chance to work on a search engines are changing quite frequently and it is not easy to keep up with all those updates, slight changes and ferocious competitors trying to make most of it.
</div>

== Google AdWords ==
<div>
Google AdWords is the single most popular PPC advertising system in the world. The AdWords platform enables businesses to create ads that appear on Google’s search engine and other Google properties.
AdWords operates on a pay-per-click model, in which users bid on keywords and pay for each click on their advertisements. Every time a search is initiated, Google digs into the pool of AdWords advertisers and chooses a set of winners to appear in the valuable ad space on its search results page. The “winners” are chosen based on a combination of factors, including the quality and relevance of their keywords and ad campaigns, as well as the size of their keyword bids. <ref>Understanding ad position and Ad Rank. Google Support - AdWords Help [online]. [cit. 2016-01-23]. Available at: https://support.google.com/adwords/answer/1722122?hl=en </ref>
</div>

= Ad Rank =
<div>
This term in general is used for the evaluation each advertisement suggestion gets based on selected features of the advertisement itself,
advertiser and success of their campaigns in the past and, of course, the amount that the advertiser is willing to pay in order to get his advertisement reach users.
The formula behind the final Ad rank consists of two elements
</div>
[[File:Ad_Rank_Formula.jpg]]

- '''the bid'''
* maximal sum of finance offered by the advertiser and

- '''quality score'''
* will be explained further in the article, but it is more complex value calculated with consideration of all related aspects of the advertisement
* the method of calculation depends on the PPC system provider, different providers measure different aspects
* is designed to show the calculated benefits of a particular advertisement
* in advance estimates the chances that the advertisement has to become a popular, often visited and overall interesting landing page (literally the web page that is being landed on after clicking the link leading to it) resulting in more income for all parties involved

== Factors in determining Quality Score ==

There are a number of factors that determine the Quality Score of a given ad. While each search engine has released directional information on the factors most important to them, presumably in an effort to guide their advertisers towards making better ads, none has revealed their formulas in detail. Below is a summary of what has been released.
* Click-through rate
* Ad copy relevance
* Landing page quality
* Landing page load time
* Geographical considerations
* Other factors <ref> Quality Score. Wikipedia [online]. [cit. 2016-01-23]. Available at: https://en.wikipedia.org/wiki/Quality_Score </ref>

= Google Ad Ranking =
<div>
Ad position is the order in which your ad shows up on a page. For example, an ad position of "1" means that your ad is the first ad on a page. In general, it's good to have your ad appear higher on a page because it's likely that more customers will see your ad. Ads can appear on the top of a search results page, on the side of the page, or on the bottom of the page.
<ref> What Is PPC? Learn the Basics of Pay-Per-Click (PPC) Marketing. Word Stream [online]. [cit. 2016-01-20]. Available at: http://www.wordstream.com/ppc </ref>
</div>

<div>
Ad position is determined by your Ad Rank in the auction. Your Ad Rank is a score that's based on your bid, the components of Quality Score (expected clickthrough rate, ad relevance, and landing page experience), and the expected impact of extensions and other ad formats. If you're using the cost-per-click bidding option, your bid is how much you're willing to pay for a single click on your ad. The quality components of Ad Rank are a measurement of the quality of your ad text and landing page in the context of what a user is searching for. <ref>Understanding ad position and Ad Rank. Google Support - AdWords Help [online]. [cit. 2016-01-23]. Available at: https://support.google.com/adwords/answer/1722122?hl=en </ref>
</div>

== Quality score factors - Google AdWords ==

Google AdWords slightly modifies the factors that are being considered when the quality score is being determined.

* Past clickthrough rate (CTR) for certain keywords
* A display URL's past CTR
* Account history
* The quality of a landing page
* Keyword/ad relevance
* Keyword/search relevance
* Geographic performance
* An advert's performance on a site
* Targeted devices <ref> Quality Score. Wikipedia [online]. [cit. 2016-01-23]. Available at: https://en.wikipedia.org/wiki/Quality_Score </ref>

[[File:Top-google-updates-adrank-change.png]]

== How the components of Quality Score affect Ad Rank ==

<div>
Every time someone does a search that triggers an ad that competes in an auction, we calculate an Ad Rank. This calculation incorporates your bid, auction-time measurements of expected CTR, ad relevance, landing page experience, and other factors. To determine the auction-time quality components, we look at a number of different factors. By improving the following factors you can help improve the quality components of your Ad Rank:
</div>

* Your ad's expected CTR: This is based in part on your ad's historical clicks and impressions (excluding factors such as ad position, extensions, and other formats that may have affected the visibility of an ad that someone previously clicked)

* Your display URL's past CTR: The historical clicks and impressions your display URL has received

* The quality of your landing page: How relevant, transparent, and easy-to-navigate your page is

* Your ad/search relevance: How relevant your ad text is to what a person searches for

* Geographic performance: How successful your account has been in the regions you're targeting

* Your targeted devices: How well your ads have been performing on different types of devices, like desktops/laptops, mobile devices, and tablets <ref>Check and understand Quality Score. Google Support - AdWords Help [online]. [cit. 2016-01-23]. Available at: https://support.google.com/adwords/answer/2454010?hl=en </ref>

== CPC - Cost per click ==
<div>
Specific kind auction system is being applied when bidding on specific keywords and establishing the final price that advertisers are going to pay for displaying their advertisement. As being said previously advertisers offer not the final amount, but maximal amount they would be willing to pay. In most cases such amount is not reached, because
</div>

* the calculation counts on several advertisers competing for the same keyword
* the PPC system provider tries to motivate advertisers to make really relevant advertisements to let the users have the most pleasant experience using their internet services and therefore lowers the prices of shown advertisements with the advertiser improving quality score

<div>
Although the provider earns less per click from the advertiser thanks to the lower pricing, there is then a higher potential of significantly increased number of users clicking the link. Implementing such strategy makes a lot more sense and theoretically does not cause any harm, on the contrary it is expected to raise the level of satisfaction of everyone including the user.
</div>

<div>
The advertiser pays as much as the amount that the advertiser that is placed right below him offered initially. Such amount is divided by the advertiser’s quality score (the higher, the lower resulting price) and 0.01 $ is added at the end to make sure that no advertisement is marketed for free.
</div>

[[File:Cpc.png]]

= Facebook Ad Ranking =
<div>
Facebook ranks advertisements using Relevance Scores referring to the general Quality Score. Facebook really tries to prevent such situation that its users become too aware of an advertisement shown specifically for them. It can be caused by either
</div>
* because there has been too much advertisement shown at one point, exceeding the amount of not commercial content

* or advertisement that has not been relevant at all or is even perceived negatively and cannot serve its purpose – the user will never get interested in clicking the link because the product/service being advertises is against their belief and causes unwanted feelings
<div>
Users can – to a certain extent – hide advertisement of a same brand when their patience limit is being reached by the unwanted content that is being shown on their Facebook wall.
</div>

<div>
The Relevance score is calculated based on the positive and negative feedback Facebook expects an ad to receive from its target audience. The more positive the expectations, the higher the Relevance score. The more often people are expected to hide the ad or report it as spam, the lower the score. The Relevance score can be anything between 1 and 10, with 10 being the highest possible score. The score is updated continuously, as people interact with the ad and keep providing feedback. <ref>Facebook starts ranking ads with Ad Relevance Score. Social Ads Tool [online]. [cit. 2016-01-23]. Available at: http://www.socialadstool.com/blog/facebook-starts-ranking-ads-with-ad-relevance-score/ </ref>
</div>

== Relevance Score in detail ==
<div>
It can lower the cost of reaching people. Put simply, the higher an ad’s relevance score is, the less it will cost to be delivered. This is because our ad delivery system is designed to show the right content to the right people, and a high relevance score is seen by the system as a positive signal.
</div>

<div>
Of course, relevance isn’t the only factor our ad delivery system considers. Bid matters too. For instance, if two ads are aimed at the same audience, there’s no guarantee that the ad with an excellent relevance score and low bid will beat the ad with a good relevance score and high bid. But, overall, having strong relevance scores will help advertisers see more efficient delivery through our system.
</div>

<div>
It can help advertisers test ad creative options before running a campaign. Advertisers can test different combinations of image and copy with different audiences, and learn which combinations offer the highest relevance scores.
</div>

<div>
It can help optimize campaigns already in progress. While ad campaigns are running, advertisers can monitor their relevance scores. If a score begins to dip, it may be an indicator that the ad’s creative or audience needs to be refreshed. <ref> Showing Relevance Scores for Ads on Facebook. Facebook for business - News [online]. [cit. 2016-01-23]. Available at: https://www.facebook.com/business/news/relevance-score </ref>
</div>

<div>
As Facebook claims itself, relevance score is not the only thing that mirrors the ad performance. Advertisement serves to accomplish the set marketing or business goals and it might do that even though the advertisement’s relevance score is not one of the highest. Relevance score is being increased by the user activities that are directly related to the advertisement itself and some of advertisement may not invoke many of such actions. If users only click on the link and their upcoming actions remain out of the Facebook algorithms scope, the advertisement may just as well be serving perfectly its objective. Objectives of a marketing may vary from getting the (even negative) attention for any sacrifice required, to using quickest option of raising awareness by creating a viral advertisement up to simply persuading customers to actually order anything on the advertised website.
</div>

If the advertiser insists on getting the best quality score possibly, the server wordstream is providing several tips hot to achieve it:

* Keyword Research – Discover new, highly relevant keywords to add to your campaigns, including long-tail opportunities that can contribute to the bulk of your overall traffic.
* Keyword Organization – Split your keywords into tight, organized groups that can be more effectively tied to individual ad campaigns.
* Refining Ad Text – Test out PPC ad copy that is more targeted to your individual ad groups. More effective ads get higher CTR, one of the best ways to improve Quality Score.
* Optimizing Landing Pages – Follow landing page best practices to create pages that connect directly with your ad groups and provide a cohesive experience for visitors, from keyword to conversion.
* Adding Negative Keywords – Continuously research, identify, and exclude irrelevant search terms that are wasting your budget. <ref> Quality Score: What Is Quality Score & How Does it Affect PPC? Word Stream [online]. [cit. 2016-01-23]. Available at: http://www.wordstream.com/quality-score </ref>

= Conclusion =
<div>
Advertising campaigns can be incredibly powerful when using all the possibilities that are available for internet marketers. The dream of such advertisement is to target only customers that are very likely to react to such advertisement, bringing them what they desire or need without them even knowing about it. General theory behind such direct targeting should be highly beneficial for customers and highly profitable for advertising companies.
</div>

<div>
As the algorithms change in very short iterations to get even more effective more quickly than ever before, responding changes in economic systems should start becoming more and more visible – economic indicators of customer utility should increase slowly as well as financial turnovers on the market of e-commerce.
</div>

<div>
It is very important to set the whole system right and justly, so that everything works transparently to everyone’s satisfaction and it all depends on the intentions of the biggest companies on the market that have an enormous impact on the whole internet future development course.
</div>

= Resources =

File:Cpc.png

2016-01-23T08:26:23Z

Lucie: Lucie načetl novou verzi File:Cpc.png

PPC systems, Ad Rank

2016-01-23T08:24:54Z

Lucie:

*'''The Essay topic''': How PPC systems work? How Google and Facebook ranks your ads?
*'''Class''':[http://isis.vse.cz/katalog/syllabus.pl?predmet=95726;zpet=..%2Fpracoviste%2Fpredmety.pl%3Fid%3D64%2Clang%3Dcz;jazyk=1;lang=sk 4IT496 System Simulation] (WS 2015/2016)
*'''Author''': Bc. Lucie Pokorná

= Introduction =
<div>
PPC systems and Ad Rank are closely connected topics because they have been created within the same time, share most of principles and serve to one common purpose – to attempt to bring more potential customers to a particular most usually commercially oriented website through paid advertising on other websites that are just being visited by targeted users. Thanks to a good Ad Rank, sponsored links are shown to users when it is calculated as relevant to be shown. In case of being clicked on, Pay-per-click system techniques come to play.
</div>

= PPC Systems =
<div>
Pay-per-click systems are marketing tools used exclusively for internet advertisement and stand for the idea of advertisers paying every time a user is attracted enough to click on the advertisement link that can be placed on dedicated sections of search engine result page after user input in a form of specific word or word combination or on any found as appropriate website that shows advertisements of other websites in order to create income for their owner.
</div>

<div>
Websites showing advertisement content have to be in a partnership with a provider of such services – particular sections of the websites are intentionally created and left blank for filling up with advertisement that the provider decides to place there. Suggestions of suitable advertisement are based on algorithms that are supposed to match certain advertisement with a certain web content so that a logical link between them is created. In other words, only in some way corresponding websites are paired to arrange as good click though rate for the advertiser as possible as well as highest possible earnings for the partnered website that provides an advertisement space.
</div>

<div>
The difference is that advertisements shown on a search engine result page are or should be customized for the query of a user and anticipate him to be more likely attracted as that link might be just the thing that they were looking for, whereas sponsored links on a website are not changed specifically for any of the website visitors and the likelihood of them clicking on such link is not that high - they may not be interested at all.
</div>

<div>
Advertisers pay partly to the owner of a website (in case the advertisements are shown there) and partly to an owner of a PPC system that was used. Search advertisement is one of the most popular advertisement on the internet.
</div>

<div>
This form of marketing can be called rather passive, because when the advertisements are well done – highly optimized with thought-through marketing strategy, using relevant only AdWords, made coherently and logically in general - not aggressively or targeting wrong user groups with too generic words – it is possible to then let the users make their decision whether to get interested or not and attract much more visitors to a website with no extra necessity to try to lure each one of them in a personalized matter. Unfortunately for advertisers, rules for making the optimal advertisement with a high enough chance to work on a search engines are changing quite frequently and it is not easy to keep up with all those updates, slight changes and ferocious competitors trying to make most of it.
</div>

== Google AdWords ==
<div>
Google AdWords is the single most popular PPC advertising system in the world. The AdWords platform enables businesses to create ads that appear on Google’s search engine and other Google properties.
AdWords operates on a pay-per-click model, in which users bid on keywords and pay for each click on their advertisements. Every time a search is initiated, Google digs into the pool of AdWords advertisers and chooses a set of winners to appear in the valuable ad space on its search results page. The “winners” are chosen based on a combination of factors, including the quality and relevance of their keywords and ad campaigns, as well as the size of their keyword bids. <ref>Understanding ad position and Ad Rank. Google Support - AdWords Help [online]. [cit. 2016-01-23]. Available at: https://support.google.com/adwords/answer/1722122?hl=en </ref>
</div>

= Ad Rank =
<div>
This term in general is used for the evaluation each advertisement suggestion gets based on selected features of the advertisement itself,
advertiser and success of their campaigns in the past and, of course, the amount that the advertiser is willing to pay in order to get his advertisement reach users.
The formula behind the final Ad rank consists of two elements
</div>
[[File:Ad_Rank_Formula.jpg]]

- '''the bid'''
* maximal sum of finance offered by the advertiser and

- '''quality score'''
* will be explained further in the article, but it is more complex value calculated with consideration of all related aspects of the advertisement
* the method of calculation depends on the PPC system provider, different providers measure different aspects
* is designed to show the calculated benefits of a particular advertisement
* in advance estimates the chances that the advertisement has to become a popular, often visited and overall interesting landing page (literally the web page that is being landed on after clicking the link leading to it) resulting in more income for all parties involved

== Factors in determining Quality Score ==

There are a number of factors that determine the Quality Score of a given ad. While each search engine has released directional information on the factors most important to them, presumably in an effort to guide their advertisers towards making better ads, none has revealed their formulas in detail. Below is a summary of what has been released.
* Click-through rate
* Ad copy relevance
* Landing page quality
* Landing page load time
* Geographical considerations
* Other factors <ref> Quality Score. Wikipedia [online]. [cit. 2016-01-23]. Available at: https://en.wikipedia.org/wiki/Quality_Score </ref>

= Google Ad Ranking =
<div>
Ad position is the order in which your ad shows up on a page. For example, an ad position of "1" means that your ad is the first ad on a page. In general, it's good to have your ad appear higher on a page because it's likely that more customers will see your ad. Ads can appear on the top of a search results page, on the side of the page, or on the bottom of the page.
<ref> What Is PPC? Learn the Basics of Pay-Per-Click (PPC) Marketing. Word Stream [online]. [cit. 2016-01-20]. Available at: http://www.wordstream.com/ppc </ref>
</div>

<div>
Ad position is determined by your Ad Rank in the auction. Your Ad Rank is a score that's based on your bid, the components of Quality Score (expected clickthrough rate, ad relevance, and landing page experience), and the expected impact of extensions and other ad formats. If you're using the cost-per-click bidding option, your bid is how much you're willing to pay for a single click on your ad. The quality components of Ad Rank are a measurement of the quality of your ad text and landing page in the context of what a user is searching for. <ref>Understanding ad position and Ad Rank. Google Support - AdWords Help [online]. [cit. 2016-01-23]. Available at: https://support.google.com/adwords/answer/1722122?hl=en </ref>
</div>

== Quality score factors - Google AdWords ==

Google AdWords slightly modifies the factors that are being considered when the quality score is being determined.

* Past clickthrough rate (CTR) for certain keywords
* A display URL's past CTR
* Account history
* The quality of a landing page
* Keyword/ad relevance
* Keyword/search relevance
* Geographic performance
* An advert's performance on a site
* Targeted devices <ref> Quality Score. Wikipedia [online]. [cit. 2016-01-23]. Available at: https://en.wikipedia.org/wiki/Quality_Score </ref>

[[File:Top-google-updates-adrank-change.png]]

== How the components of Quality Score affect Ad Rank ==

<div>
Every time someone does a search that triggers an ad that competes in an auction, we calculate an Ad Rank. This calculation incorporates your bid, auction-time measurements of expected CTR, ad relevance, landing page experience, and other factors. To determine the auction-time quality components, we look at a number of different factors. By improving the following factors you can help improve the quality components of your Ad Rank:
</div>

* Your ad's expected CTR: This is based in part on your ad's historical clicks and impressions (excluding factors such as ad position, extensions, and other formats that may have affected the visibility of an ad that someone previously clicked)

* Your display URL's past CTR: The historical clicks and impressions your display URL has received

* The quality of your landing page: How relevant, transparent, and easy-to-navigate your page is

* Your ad/search relevance: How relevant your ad text is to what a person searches for

* Geographic performance: How successful your account has been in the regions you're targeting

* Your targeted devices: How well your ads have been performing on different types of devices, like desktops/laptops, mobile devices, and tablets <ref>Check and understand Quality Score. Google Support - AdWords Help [online]. [cit. 2016-01-23]. Available at: https://support.google.com/adwords/answer/2454010?hl=en </ref>

== CPC - Cost per click ==
<div>
Specific kind auction system is being applied when bidding on specific keywords and establishing the final price that advertisers are going to pay for displaying their advertisement. As being said previously advertisers offer not the final amount, but maximal amount they would be willing to pay. In most cases such amount is not reached, because
</div>

* the calculation counts on several advertisers competing for the same keyword
* the PPC system provider tries to motivate advertisers to make really relevant advertisements to let the users have the most pleasant experience using their internet services and therefore lowers the prices of shown advertisements with the advertiser improving quality score

<div>
Although the provider earns less per click from the advertiser thanks to the lower pricing, there is then a higher potential of significantly increased number of users clicking the link. Implementing such strategy makes a lot more sense and theoretically does not cause any harm, on the contrary it is expected to raise the level of satisfaction of everyone including the user.
</div>

<div>
The advertiser pays as much as the amount that the advertiser that is placed right below him offered initially. Such amount is divided by the advertiser’s quality score (the higher, the lower resulting price) and 0.01 $ is added at the end to make sure that no advertisement is marketed for free.
</div>

[[File:hacking-adwords-how-quality-score-impacts-cpc.png]]

[[File:Cpc.png]]

= Facebook Ad Ranking =
<div>
Facebook ranks advertisements using Relevance Scores referring to the general Quality Score. Facebook really tries to prevent such situation that its users become too aware of an advertisement shown specifically for them. It can be caused by either
</div>
* because there has been too much advertisement shown at one point, exceeding the amount of not commercial content

* or advertisement that has not been relevant at all or is even perceived negatively and cannot serve its purpose – the user will never get interested in clicking the link because the product/service being advertises is against their belief and causes unwanted feelings
<div>
Users can – to a certain extent – hide advertisement of a same brand when their patience limit is being reached by the unwanted content that is being shown on their Facebook wall.
</div>

<div>
The Relevance score is calculated based on the positive and negative feedback Facebook expects an ad to receive from its target audience. The more positive the expectations, the higher the Relevance score. The more often people are expected to hide the ad or report it as spam, the lower the score. The Relevance score can be anything between 1 and 10, with 10 being the highest possible score. The score is updated continuously, as people interact with the ad and keep providing feedback. <ref>Facebook starts ranking ads with Ad Relevance Score. Social Ads Tool [online]. [cit. 2016-01-23]. Available at: http://www.socialadstool.com/blog/facebook-starts-ranking-ads-with-ad-relevance-score/ </ref>
</div>

== Relevance Score in detail ==
<div>
It can lower the cost of reaching people. Put simply, the higher an ad’s relevance score is, the less it will cost to be delivered. This is because our ad delivery system is designed to show the right content to the right people, and a high relevance score is seen by the system as a positive signal.
</div>

<div>
Of course, relevance isn’t the only factor our ad delivery system considers. Bid matters too. For instance, if two ads are aimed at the same audience, there’s no guarantee that the ad with an excellent relevance score and low bid will beat the ad with a good relevance score and high bid. But, overall, having strong relevance scores will help advertisers see more efficient delivery through our system.
</div>

<div>
It can help advertisers test ad creative options before running a campaign. Advertisers can test different combinations of image and copy with different audiences, and learn which combinations offer the highest relevance scores.
</div>

<div>
It can help optimize campaigns already in progress. While ad campaigns are running, advertisers can monitor their relevance scores. If a score begins to dip, it may be an indicator that the ad’s creative or audience needs to be refreshed. <ref> Showing Relevance Scores for Ads on Facebook. Facebook for business - News [online]. [cit. 2016-01-23]. Available at: https://www.facebook.com/business/news/relevance-score </ref>
</div>

<div>
As Facebook claims itself, relevance score is not the only thing that mirrors the ad performance. Advertisement serves to accomplish the set marketing or business goals and it might do that even though the advertisement’s relevance score is not one of the highest. Relevance score is being increased by the user activities that are directly related to the advertisement itself and some of advertisement may not invoke many of such actions. If users only click on the link and their upcoming actions remain out of the Facebook algorithms scope, the advertisement may just as well be serving perfectly its objective. Objectives of a marketing may vary from getting the (even negative) attention for any sacrifice required, to using quickest option of raising awareness by creating a viral advertisement up to simply persuading customers to actually order anything on the advertised website.
</div>

If the advertiser insists on getting the best quality score possibly, the server wordstream is providing several tips hot to achieve it:

* Keyword Research – Discover new, highly relevant keywords to add to your campaigns, including long-tail opportunities that can contribute to the bulk of your overall traffic.
* Keyword Organization – Split your keywords into tight, organized groups that can be more effectively tied to individual ad campaigns.
* Refining Ad Text – Test out PPC ad copy that is more targeted to your individual ad groups. More effective ads get higher CTR, one of the best ways to improve Quality Score.
* Optimizing Landing Pages – Follow landing page best practices to create pages that connect directly with your ad groups and provide a cohesive experience for visitors, from keyword to conversion.
* Adding Negative Keywords – Continuously research, identify, and exclude irrelevant search terms that are wasting your budget. <ref> Quality Score: What Is Quality Score & How Does it Affect PPC? Word Stream [online]. [cit. 2016-01-23]. Available at: http://www.wordstream.com/quality-score </ref>

= Conclusion =
<div>
Advertising campaigns can be incredibly powerful when using all the possibilities that are available for internet marketers. The dream of such advertisement is to target only customers that are very likely to react to such advertisement, bringing them what they desire or need without them even knowing about it. General theory behind such direct targeting should be highly beneficial for customers and highly profitable for advertising companies.
</div>

<div>
As the algorithms change in very short iterations to get even more effective more quickly than ever before, responding changes in economic systems should start becoming more and more visible – economic indicators of customer utility should increase slowly as well as financial turnovers on the market of e-commerce.
</div>

<div>
It is very important to set the whole system right and justly, so that everything works transparently to everyone’s satisfaction and it all depends on the intentions of the biggest companies on the market that have an enormous impact on the whole internet future development course.
</div>

= Resources =

2016-01-23T08:19:07Z

Lucie: Lucie načetl novou verzi File:Adwords.png

PPC systems, Ad Rank

2016-01-23T08:17:00Z

Lucie:

*'''The Essay topic''': How PPC systems work? How Google and Facebook ranks your ads?
*'''Class''':[http://isis.vse.cz/katalog/syllabus.pl?predmet=95726;zpet=..%2Fpracoviste%2Fpredmety.pl%3Fid%3D64%2Clang%3Dcz;jazyk=1;lang=sk 4IT496 System Simulation] (WS 2015/2016)
*'''Author''': Bc. Lucie Pokorná

= Introduction =
<div>
PPC systems and Ad Rank are closely connected topics because they have been created within the same time, share most of principles and serve to one common purpose – to attempt to bring more potential customers to a particular most usually commercially oriented website through paid advertising on other websites that are just being visited by targeted users. Thanks to a good Ad Rank, sponsored links are shown to users when it is calculated as relevant to be shown. In case of being clicked on, Pay-per-click system techniques come to play.
</div>

= PPC Systems =
<div>
Pay-per-click systems are marketing tools used exclusively for internet advertisement and stand for the idea of advertisers paying every time a user is attracted enough to click on the advertisement link that can be placed on dedicated sections of search engine result page after user input in a form of specific word or word combination or on any found as appropriate website that shows advertisements of other websites in order to create income for their owner.
</div>

<div>
Websites showing advertisement content have to be in a partnership with a provider of such services – particular sections of the websites are intentionally created and left blank for filling up with advertisement that the provider decides to place there. Suggestions of suitable advertisement are based on algorithms that are supposed to match certain advertisement with a certain web content so that a logical link between them is created. In other words, only in some way corresponding websites are paired to arrange as good click though rate for the advertiser as possible as well as highest possible earnings for the partnered website that provides an advertisement space.
</div>

<div>
The difference is that advertisements shown on a search engine result page are or should be customized for the query of a user and anticipate him to be more likely attracted as that link might be just the thing that they were looking for, whereas sponsored links on a website are not changed specifically for any of the website visitors and the likelihood of them clicking on such link is not that high - they may not be interested at all.
</div>

<div>
Advertisers pay partly to the owner of a website (in case the advertisements are shown there) and partly to an owner of a PPC system that was used. Search advertisement is one of the most popular advertisement on the internet.
</div>

<div>
This form of marketing can be called rather passive, because when the advertisements are well done – highly optimized with thought-through marketing strategy, using relevant only AdWords, made coherently and logically in general - not aggressively or targeting wrong user groups with too generic words – it is possible to then let the users make their decision whether to get interested or not and attract much more visitors to a website with no extra necessity to try to lure each one of them in a personalized matter. Unfortunately for advertisers, rules for making the optimal advertisement with a high enough chance to work on a search engines are changing quite frequently and it is not easy to keep up with all those updates, slight changes and ferocious competitors trying to make most of it.
</div>

== Google AdWords ==
<div>
Google AdWords is the single most popular PPC advertising system in the world. The AdWords platform enables businesses to create ads that appear on Google’s search engine and other Google properties.
AdWords operates on a pay-per-click model, in which users bid on keywords and pay for each click on their advertisements. Every time a search is initiated, Google digs into the pool of AdWords advertisers and chooses a set of winners to appear in the valuable ad space on its search results page. The “winners” are chosen based on a combination of factors, including the quality and relevance of their keywords and ad campaigns, as well as the size of their keyword bids. <ref>Understanding ad position and Ad Rank. Google Support - AdWords Help [online]. [cit. 2016-01-23]. Available at: https://support.google.com/adwords/answer/1722122?hl=en </ref>
</div>

= Ad Rank =
<div>
This term in general is used for the evaluation each advertisement suggestion gets based on selected features of the advertisement itself,
advertiser and success of their campaigns in the past and, of course, the amount that the advertiser is willing to pay in order to get his advertisement reach users.
The formula behind the final Ad rank consists of two elements
</div>
[[File:Ad_Rank_Formula.jpg]]

- '''the bid'''
* maximal sum of finance offered by the advertiser and

- '''quality score'''
* will be explained further in the article, but it is more complex value calculated with consideration of all related aspects of the advertisement
* the method of calculation depends on the PPC system provider, different providers measure different aspects
* is designed to show the calculated benefits of a particular advertisement
* in advance estimates the chances that the advertisement has to become a popular, often visited and overall interesting landing page (literally the web page that is being landed on after clicking the link leading to it) resulting in more income for all parties involved

== Factors in determining Quality Score ==

There are a number of factors that determine the Quality Score of a given ad. While each search engine has released directional information on the factors most important to them, presumably in an effort to guide their advertisers towards making better ads, none has revealed their formulas in detail. Below is a summary of what has been released.
* Click-through rate
* Ad copy relevance
* Landing page quality
* Landing page load time
* Geographical considerations
* Other factors <ref> Quality Score. Wikipedia [online]. [cit. 2016-01-23]. Available at: https://en.wikipedia.org/wiki/Quality_Score </ref>

= Google Ad Ranking =
<div>
Ad position is the order in which your ad shows up on a page. For example, an ad position of "1" means that your ad is the first ad on a page. In general, it's good to have your ad appear higher on a page because it's likely that more customers will see your ad. Ads can appear on the top of a search results page, on the side of the page, or on the bottom of the page.
<ref> What Is PPC? Learn the Basics of Pay-Per-Click (PPC) Marketing. Word Stream [online]. [cit. 2016-01-20]. Available at: http://www.wordstream.com/ppc </ref>
</div>

<div>
Ad position is determined by your Ad Rank in the auction. Your Ad Rank is a score that's based on your bid, the components of Quality Score (expected clickthrough rate, ad relevance, and landing page experience), and the expected impact of extensions and other ad formats. If you're using the cost-per-click bidding option, your bid is how much you're willing to pay for a single click on your ad. The quality components of Ad Rank are a measurement of the quality of your ad text and landing page in the context of what a user is searching for. <ref>Understanding ad position and Ad Rank. Google Support - AdWords Help [online]. [cit. 2016-01-23]. Available at: https://support.google.com/adwords/answer/1722122?hl=en </ref>
</div>

== Quality score factors - Google AdWords ==

Google AdWords slightly modifies the factors that are being considered when the quality score is being determined.

* Past clickthrough rate (CTR) for certain keywords
* A display URL's past CTR
* Account history
* The quality of a landing page
* Keyword/ad relevance
* Keyword/search relevance
* Geographic performance
* An advert's performance on a site
* Targeted devices <ref> Quality Score. Wikipedia [online]. [cit. 2016-01-23]. Available at: https://en.wikipedia.org/wiki/Quality_Score </ref>

[[File:Top-google-updates-adrank-change.png]]

== How the components of Quality Score affect Ad Rank ==

<div>
Every time someone does a search that triggers an ad that competes in an auction, we calculate an Ad Rank. This calculation incorporates your bid, auction-time measurements of expected CTR, ad relevance, landing page experience, and other factors. To determine the auction-time quality components, we look at a number of different factors. By improving the following factors you can help improve the quality components of your Ad Rank:
</div>

* Your ad's expected CTR: This is based in part on your ad's historical clicks and impressions (excluding factors such as ad position, extensions, and other formats that may have affected the visibility of an ad that someone previously clicked)

* Your display URL's past CTR: The historical clicks and impressions your display URL has received

* The quality of your landing page: How relevant, transparent, and easy-to-navigate your page is

* Your ad/search relevance: How relevant your ad text is to what a person searches for

* Geographic performance: How successful your account has been in the regions you're targeting

* Your targeted devices: How well your ads have been performing on different types of devices, like desktops/laptops, mobile devices, and tablets <ref>Check and understand Quality Score. Google Support - AdWords Help [online]. [cit. 2016-01-23]. Available at: https://support.google.com/adwords/answer/2454010?hl=en </ref>

== CPC - Cost per click ==
<div>
Specific kind auction system is being applied when bidding on specific keywords and establishing the final price that advertisers are going to pay for displaying their advertisement. As being said reviously advertisers offer not the final amount, but maximal amount they would be willing to pay. In most cases such amount is not reached, because
</div>

* the calculation counts on several advertisers competing for the same keyword
* the PPC system provider tries to motivate advertisers to make really relevant advertisements to let the users have the most pleasant experience using their internet services and therefore lowers the prices of shown advertisements with the advertiser improving quality score

<div>
Although the provider earns less per click from the advertiser thanks to the lower pricing, there is then a higher potential of significantly increased number of users clicking the link. Implementing such strategy makes a lot more sense and theoretically does not cause any harm, on the contrary it is expected to raise the level of satisfaction of everyone including the user.
</div>

<div>
The advertiser pays as much as the amount that the advertiser that is placed right below him offered initially. Such amount is divided by the advertiser’s quality score (the higher, the lower resulting price) and 0.01 $ is added at the end to make sure that no advertisement is marketed for free.
</div>

[[File:adwords.png]]

= Facebook Ad Ranking =
<div>
Facebook ranks advertisements using Relevance Scores referring to the general Quality Score. Facebook really tries to prevent such situation that its users become too aware of an advertisement shown specifically for them. It can be caused by either
</div>
* because there has been too much advertisement shown at one point, exceeding the amount of not commercial content

* or advertisement that has not been relevant at all or is even perceived negatively and cannot serve its purpose – the user will never get interested in clicking the link because the product/service being advertises is against their belief and causes unwanted feelings
<div>
Users can – to a certain extent – hide advertisement of a same brand when their patience limit is being reached by the unwanted content that is being shown on their Facebook wall.
</div>

<div>
The Relevance score is calculated based on the positive and negative feedback Facebook expects an ad to receive from its target audience. The more positive the expectations, the higher the Relevance score. The more often people are expected to hide the ad or report it as spam, the lower the score. The Relevance score can be anything between 1 and 10, with 10 being the highest possible score. The score is updated continuously, as people interact with the ad and keep providing feedback. <ref>Facebook starts ranking ads with Ad Relevance Score. Social Ads Tool [online]. [cit. 2016-01-23]. Available at: http://www.socialadstool.com/blog/facebook-starts-ranking-ads-with-ad-relevance-score/ </ref>
</div>

== Relevance Score in detail ==
<div>
It can lower the cost of reaching people. Put simply, the higher an ad’s relevance score is, the less it will cost to be delivered. This is because our ad delivery system is designed to show the right content to the right people, and a high relevance score is seen by the system as a positive signal.
</div>

<div>
Of course, relevance isn’t the only factor our ad delivery system considers. Bid matters too. For instance, if two ads are aimed at the same audience, there’s no guarantee that the ad with an excellent relevance score and low bid will beat the ad with a good relevance score and high bid. But, overall, having strong relevance scores will help advertisers see more efficient delivery through our system.
</div>

<div>
It can help advertisers test ad creative options before running a campaign. Advertisers can test different combinations of image and copy with different audiences, and learn which combinations offer the highest relevance scores.
</div>

<div>
It can help optimize campaigns already in progress. While ad campaigns are running, advertisers can monitor their relevance scores. If a score begins to dip, it may be an indicator that the ad’s creative or audience needs to be refreshed. <ref> Showing Relevance Scores for Ads on Facebook. Facebook for business - News [online]. [cit. 2016-01-23]. Available at: https://www.facebook.com/business/news/relevance-score </ref>
</div>

<div>
As Facebook claims itself, relevance score is not the only thing that mirrors the ad performance. Advertisement serves to accomplish the set marketing or business goals and it might do that even though the advertisement’s relevance score is not one of the highest. Relevance score is being increased by the user activities that are directly related to the advertisement itself and some of advertisement may not invoke many of such actions. If users only click on the link and their upcoming actions remain out of the Facebook algorithms scope, the advertisement may just as well be serving perfectly its objective. Objectives of a marketing may vary from getting the (even negative) attention for any sacrifice required, to using quickest option of raising awareness by creating a viral advertisement up to simply persuading customers to actually order anything on the advertised website.
</div>

If the advertiser insists on getting the best quality score possibly, the server wordstream is providing several tips hot to achieve it:

* Keyword Research – Discover new, highly relevant keywords to add to your campaigns, including long-tail opportunities that can contribute to the bulk of your overall traffic.
* Keyword Organization – Split your keywords into tight, organized groups that can be more effectively tied to individual ad campaigns.
* Refining Ad Text – Test out PPC ad copy that is more targeted to your individual ad groups. More effective ads get higher CTR, one of the best ways to improve Quality Score.
* Optimizing Landing Pages – Follow landing page best practices to create pages that connect directly with your ad groups and provide a cohesive experience for visitors, from keyword to conversion.
* Adding Negative Keywords – Continuously research, identify, and exclude irrelevant search terms that are wasting your budget. <ref> Quality Score: What Is Quality Score & How Does it Affect PPC? Word Stream [online]. [cit. 2016-01-23]. Available at: http://www.wordstream.com/quality-score </ref>

= Conclusion =
<div>
Advertising campaigns can be incredibly powerful when using all the possibilities that are available for internet marketers. The dream of such advertisement is to target only customers that are very likely to react to such advertisement, bringing them what they desire or need without them even knowing about it. General theory behind such direct targeting should be highly beneficial for customers and highly profitable for advertising companies.
</div>

<div>
As the algorithms change in very short iterations to get even more effective more quickly than ever before, responding changes in economic systems should start becoming more and more visible – economic indicators of customer utility should increase slowly as well as financial turnovers on the market of e-commerce.
</div>

<div>
It is very important to set the whole system right and justly, so that everything works transparently to everyone’s satisfaction and it all depends on the intentions of the biggest companies on the market that have an enormous impact on the whole internet future development course.
</div>

= Resources =

File:Adwords.png

2016-01-23T08:16:30Z

Lucie: Lucie načetl novou verzi File:Adwords.png

PPC systems, Ad Rank

2016-01-23T08:14:11Z

Lucie:

*'''The Essay topic''': How PPC systems work? How Google and Facebook ranks your ads?
*'''Class''':[http://isis.vse.cz/katalog/syllabus.pl?predmet=95726;zpet=..%2Fpracoviste%2Fpredmety.pl%3Fid%3D64%2Clang%3Dcz;jazyk=1;lang=sk 4IT496 System Simulation] (WS 2015/2016)
*'''Author''': Bc. Lucie Pokorná

= Introduction =
<div>
PPC systems and Ad Rank are closely connected topics because they have been created within the same time, share most of principles and serve to one common purpose – to attempt to bring more potential customers to a particular most usually commercially oriented website through paid advertising on other websites that are just being visited by targeted users. Thanks to a good Ad Rank, sponsored links are shown to users when it is calculated as relevant to be shown. In case of being clicked on, Pay-per-click system techniques come to play.
</div>

= PPC Systems =
<div>
Pay-per-click systems are marketing tools used exclusively for internet advertisement and stand for the idea of advertisers paying every time a user is attracted enough to click on the advertisement link that can be placed on dedicated sections of search engine result page after user input in a form of specific word or word combination or on any found as appropriate website that shows advertisements of other websites in order to create income for their owner.
</div>

<div>
Websites showing advertisement content have to be in a partnership with a provider of such services – particular sections of the websites are intentionally created and left blank for filling up with advertisement that the provider decides to place there. Suggestions of suitable advertisement are based on algorithms that are supposed to match certain advertisement with a certain web content so that a logical link between them is created. In other words, only in some way corresponding websites are paired to arrange as good click though rate for the advertiser as possible as well as highest possible earnings for the partnered website that provides an advertisement space.
</div>

<div>
The difference is that advertisements shown on a search engine result page are or should be customized for the query of a user and anticipate him to be more likely attracted as that link might be just the thing that they were looking for, whereas sponsored links on a website are not changed specifically for any of the website visitors and the likelihood of them clicking on such link is not that high - they may not be interested at all.
</div>

<div>
Advertisers pay partly to the owner of a website (in case the advertisements are shown there) and partly to an owner of a PPC system that was used. Search advertisement is one of the most popular advertisement on the internet.
</div>

<div>
This form of marketing can be called rather passive, because when the advertisements are well done – highly optimized with thought-through marketing strategy, using relevant only AdWords, made coherently and logically in general - not aggressively or targeting wrong user groups with too generic words – it is possible to then let the users make their decision whether to get interested or not and attract much more visitors to a website with no extra necessity to try to lure each one of them in a personalized matter. Unfortunately for advertisers, rules for making the optimal advertisement with a high enough chance to work on a search engines are changing quite frequently and it is not easy to keep up with all those updates, slight changes and ferocious competitors trying to make most of it.
</div>

== Google AdWords ==
<div>
Google AdWords is the single most popular PPC advertising system in the world. The AdWords platform enables businesses to create ads that appear on Google’s search engine and other Google properties.
AdWords operates on a pay-per-click model, in which users bid on keywords and pay for each click on their advertisements. Every time a search is initiated, Google digs into the pool of AdWords advertisers and chooses a set of winners to appear in the valuable ad space on its search results page. The “winners” are chosen based on a combination of factors, including the quality and relevance of their keywords and ad campaigns, as well as the size of their keyword bids. <ref>Understanding ad position and Ad Rank. Google Support - AdWords Help [online]. [cit. 2016-01-23]. Available at: https://support.google.com/adwords/answer/1722122?hl=en </ref>
</div>

= Ad Rank =
<div>
This term in general is used for the evaluation each advertisement suggestion gets based on selected features of the advertisement itself,
advertiser and success of their campaigns in the past and, of course, the amount that the advertiser is willing to pay in order to get his advertisement reach users.
The formula behind the final Ad rank consists of two elements
</div>
[[File:Ad_Rank_Formula.jpg]]

- '''the bid'''
* maximal sum of finance offered by the advertiser and

- '''quality score'''
* will be explained further in the article, but it is more complex value calculated with consideration of all related aspects of the advertisement
* the method of calculation depends on the PPC system provider, different providers measure different aspects
* is designed to show the calculated benefits of a particular advertisement
* in advance estimates the chances that the advertisement has to become a popular, often visited and overall interesting landing page (literally the web page that is being landed on after clicking the link leading to it) resulting in more income for all parties involved

== Factors in determining Quality Score ==

There are a number of factors that determine the Quality Score of a given ad. While each search engine has released directional information on the factors most important to them, presumably in an effort to guide their advertisers towards making better ads, none has revealed their formulas in detail. Below is a summary of what has been released.
* Click-through rate
* Ad copy relevance
* Landing page quality
* Landing page load time
* Geographical considerations
* Other factors <ref> Quality Score. Wikipedia [online]. [cit. 2016-01-23]. Available at: https://en.wikipedia.org/wiki/Quality_Score </ref>

= Google Ad Ranking =
<div>
Ad position is the order in which your ad shows up on a page. For example, an ad position of "1" means that your ad is the first ad on a page. In general, it's good to have your ad appear higher on a page because it's likely that more customers will see your ad. Ads can appear on the top of a search results page, on the side of the page, or on the bottom of the page.
<ref> What Is PPC? Learn the Basics of Pay-Per-Click (PPC) Marketing. Word Stream [online]. [cit. 2016-01-20]. Available at: http://www.wordstream.com/ppc </ref>
</div>

<div>
Ad position is determined by your Ad Rank in the auction. Your Ad Rank is a score that's based on your bid, the components of Quality Score (expected clickthrough rate, ad relevance, and landing page experience), and the expected impact of extensions and other ad formats. If you're using the cost-per-click bidding option, your bid is how much you're willing to pay for a single click on your ad. The quality components of Ad Rank are a measurement of the quality of your ad text and landing page in the context of what a user is searching for. <ref>Understanding ad position and Ad Rank. Google Support - AdWords Help [online]. [cit. 2016-01-23]. Available at: https://support.google.com/adwords/answer/1722122?hl=en </ref>
</div>

== Quality score factors - Google AdWords ==

Google AdWords slightly modifies the factors that are being considered when the quality score is being determined.

* Past clickthrough rate (CTR) for certain keywords
* A display URL's past CTR
* Account history
* The quality of a landing page
* Keyword/ad relevance
* Keyword/search relevance
* Geographic performance
* An advert's performance on a site
* Targeted devices <ref> Quality Score. Wikipedia [online]. [cit. 2016-01-23]. Available at: https://en.wikipedia.org/wiki/Quality_Score </ref>

[[File:Top-google-updates-adrank-change.png]]

== How the components of Quality Score affect Ad Rank ==

<div>
Every time someone does a search that triggers an ad that competes in an auction, we calculate an Ad Rank. This calculation incorporates your bid, auction-time measurements of expected CTR, ad relevance, landing page experience, and other factors. To determine the auction-time quality components, we look at a number of different factors. By improving the following factors you can help improve the quality components of your Ad Rank:
</div>

* Your ad's expected CTR: This is based in part on your ad's historical clicks and impressions (excluding factors such as ad position, extensions, and other formats that may have affected the visibility of an ad that someone previously clicked)

* Your display URL's past CTR: The historical clicks and impressions your display URL has received

* The quality of your landing page: How relevant, transparent, and easy-to-navigate your page is

* Your ad/search relevance: How relevant your ad text is to what a person searches for

* Geographic performance: How successful your account has been in the regions you're targeting

* Your targeted devices: How well your ads have been performing on different types of devices, like desktops/laptops, mobile devices, and tablets <ref>Check and understand Quality Score. Google Support - AdWords Help [online]. [cit. 2016-01-23]. Available at: https://support.google.com/adwords/answer/2454010?hl=en </ref>

== CPC - Cost per click ==
<div>
Specific kind auction system is being applied when bidding on specific keywords and establishing the final price that advertisers are going to pay for displaying their advertisement. As being said reviously advertisers offer not the final amount, but maximal amount they would be willing to pay. In most cases such amount is not reached, because
</div>

* the calculation counts on several advertisers competing for the same keyword
* the PPC system provider tries to motivate advertisers to make really relevant advertisements to let the users have the most pleasant experience using their internet services and therefore lowers the prices of shown advertisements with the advertiser improving quality score

<div>
Although the provider earns less per click from the advertiser thanks to the lower pricing, there is then a higher potential of significantly increased number of users clicking the link. Implementing such strategy makes a lot more sense and theoretically does not cause any harm, on the contrary it is expected to raise the level of satisfaction of everyone including the user.
</div>

<div>
The advertiser pays as much as the amount that the advertiser that is placed right below him offered initially. Such amount is divided by the advertiser’s quality score (the higher, the lower resulting price) and 0.01 $ is added at the end to make sure that no advertisement is marketed for free.
</div>

[[File:Adwords.png]]

= Facebook Ad Ranking =
<div>
Facebook ranks advertisements using Relevance Scores referring to the general Quality Score. Facebook really tries to prevent such situation that its users become too aware of an advertisement shown specifically for them. It can be caused by either
</div>
* because there has been too much advertisement shown at one point, exceeding the amount of not commercial content

* or advertisement that has not been relevant at all or is even perceived negatively and cannot serve its purpose – the user will never get interested in clicking the link because the product/service being advertises is against their belief and causes unwanted feelings
<div>
Users can – to a certain extent – hide advertisement of a same brand when their patience limit is being reached by the unwanted content that is being shown on their Facebook wall.
</div>

<div>
The Relevance score is calculated based on the positive and negative feedback Facebook expects an ad to receive from its target audience. The more positive the expectations, the higher the Relevance score. The more often people are expected to hide the ad or report it as spam, the lower the score. The Relevance score can be anything between 1 and 10, with 10 being the highest possible score. The score is updated continuously, as people interact with the ad and keep providing feedback. <ref>Facebook starts ranking ads with Ad Relevance Score. Social Ads Tool [online]. [cit. 2016-01-23]. Available at: http://www.socialadstool.com/blog/facebook-starts-ranking-ads-with-ad-relevance-score/ </ref>
</div>

== Relevance Score in detail ==
<div>
It can lower the cost of reaching people. Put simply, the higher an ad’s relevance score is, the less it will cost to be delivered. This is because our ad delivery system is designed to show the right content to the right people, and a high relevance score is seen by the system as a positive signal.
</div>

<div>
Of course, relevance isn’t the only factor our ad delivery system considers. Bid matters too. For instance, if two ads are aimed at the same audience, there’s no guarantee that the ad with an excellent relevance score and low bid will beat the ad with a good relevance score and high bid. But, overall, having strong relevance scores will help advertisers see more efficient delivery through our system.
</div>

<div>
It can help advertisers test ad creative options before running a campaign. Advertisers can test different combinations of image and copy with different audiences, and learn which combinations offer the highest relevance scores.
</div>

<div>
It can help optimize campaigns already in progress. While ad campaigns are running, advertisers can monitor their relevance scores. If a score begins to dip, it may be an indicator that the ad’s creative or audience needs to be refreshed. <ref> Showing Relevance Scores for Ads on Facebook. Facebook for business - News [online]. [cit. 2016-01-23]. Available at: https://www.facebook.com/business/news/relevance-score </ref>
</div>

<div>
As Facebook claims itself, relevance score is not the only thing that mirrors the ad performance. Advertisement serves to accomplish the set marketing or business goals and it might do that even though the advertisement’s relevance score is not one of the highest. Relevance score is being increased by the user activities that are directly related to the advertisement itself and some of advertisement may not invoke many of such actions. If users only click on the link and their upcoming actions remain out of the Facebook algorithms scope, the advertisement may just as well be serving perfectly its objective. Objectives of a marketing may vary from getting the (even negative) attention for any sacrifice required, to using quickest option of raising awareness by creating a viral advertisement up to simply persuading customers to actually order anything on the advertised website.
</div>

If the advertiser insists on getting the best quality score possibly, the server wordstream is providing several tips hot to achieve it:

* Keyword Research – Discover new, highly relevant keywords to add to your campaigns, including long-tail opportunities that can contribute to the bulk of your overall traffic.
* Keyword Organization – Split your keywords into tight, organized groups that can be more effectively tied to individual ad campaigns.
* Refining Ad Text – Test out PPC ad copy that is more targeted to your individual ad groups. More effective ads get higher CTR, one of the best ways to improve Quality Score.
* Optimizing Landing Pages – Follow landing page best practices to create pages that connect directly with your ad groups and provide a cohesive experience for visitors, from keyword to conversion.
* Adding Negative Keywords – Continuously research, identify, and exclude irrelevant search terms that are wasting your budget. <ref> Quality Score: What Is Quality Score & How Does it Affect PPC? Word Stream [online]. [cit. 2016-01-23]. Available at: http://www.wordstream.com/quality-score </ref>

= Conclusion =
<div>
Advertising campaigns can be incredibly powerful when using all the possibilities that are available for internet marketers. The dream of such advertisement is to target only customers that are very likely to react to such advertisement, bringing them what they desire or need without them even knowing about it. General theory behind such direct targeting should be highly beneficial for customers and highly profitable for advertising companies.
</div>

<div>
As the algorithms change in very short iterations to get even more effective more quickly than ever before, responding changes in economic systems should start becoming more and more visible – economic indicators of customer utility should increase slowly as well as financial turnovers on the market of e-commerce.
</div>

<div>
It is very important to set the whole system right and justly, so that everything works transparently to everyone’s satisfaction and it all depends on the intentions of the biggest companies on the market that have an enormous impact on the whole internet future development course.
</div>

= Resources =

PPC systems, Ad Rank

2016-01-23T08:13:38Z

Lucie:

*'''The Essay topic''': How PPC systems work? How Google and Facebook ranks your ads?
*'''Class''':[http://isis.vse.cz/katalog/syllabus.pl?predmet=95726;zpet=..%2Fpracoviste%2Fpredmety.pl%3Fid%3D64%2Clang%3Dcz;jazyk=1;lang=sk 4IT496 System Simulation] (WS 2015/2016)
*'''Author''': Bc. Lucie Pokorná

= Introduction =
<div>
PPC systems and Ad Rank are closely connected topics because they have been created within the same time, share most of principles and serve to one common purpose – to attempt to bring more potential customers to a particular most usually commercially oriented website through paid advertising on other websites that are just being visited by targeted users. Thanks to a good Ad Rank, sponsored links are shown to users when it is calculated as relevant to be shown. In case of being clicked on, Pay-per-click system techniques come to play.
</div>

= PPC Systems =
<div>
Pay-per-click systems are marketing tools used exclusively for internet advertisement and stand for the idea of advertisers paying every time a user is attracted enough to click on the advertisement link that can be placed on dedicated sections of search engine result page after user input in a form of specific word or word combination or on any found as appropriate website that shows advertisements of other websites in order to create income for their owner.
</div>

<div>
Websites showing advertisement content have to be in a partnership with a provider of such services – particular sections of the websites are intentionally created and left blank for filling up with advertisement that the provider decides to place there. Suggestions of suitable advertisement are based on algorithms that are supposed to match certain advertisement with a certain web content so that a logical link between them is created. In other words, only in some way corresponding websites are paired to arrange as good click though rate for the advertiser as possible as well as highest possible earnings for the partnered website that provides an advertisement space.
</div>

<div>
The difference is that advertisements shown on a search engine result page are or should be customized for the query of a user and anticipate him to be more likely attracted as that link might be just the thing that they were looking for, whereas sponsored links on a website are not changed specifically for any of the website visitors and the likelihood of them clicking on such link is not that high - they may not be interested at all.
</div>

<div>
Advertisers pay partly to the owner of a website (in case the advertisements are shown there) and partly to an owner of a PPC system that was used. Search advertisement is one of the most popular advertisement on the internet.
</div>

<div>
This form of marketing can be called rather passive, because when the advertisements are well done – highly optimized with thought-through marketing strategy, using relevant only AdWords, made coherently and logically in general - not aggressively or targeting wrong user groups with too generic words – it is possible to then let the users make their decision whether to get interested or not and attract much more visitors to a website with no extra necessity to try to lure each one of them in a personalized matter. Unfortunately for advertisers, rules for making the optimal advertisement with a high enough chance to work on a search engines are changing quite frequently and it is not easy to keep up with all those updates, slight changes and ferocious competitors trying to make most of it.
</div>

== Google AdWords ==
<div>
Google AdWords is the single most popular PPC advertising system in the world. The AdWords platform enables businesses to create ads that appear on Google’s search engine and other Google properties.
AdWords operates on a pay-per-click model, in which users bid on keywords and pay for each click on their advertisements. Every time a search is initiated, Google digs into the pool of AdWords advertisers and chooses a set of winners to appear in the valuable ad space on its search results page. The “winners” are chosen based on a combination of factors, including the quality and relevance of their keywords and ad campaigns, as well as the size of their keyword bids. <ref>Understanding ad position and Ad Rank. Google Support - AdWords Help [online]. [cit. 2016-01-23]. Available at: https://support.google.com/adwords/answer/1722122?hl=en </ref>
</div>

= Ad Rank =
<div>
This term in general is used for the evaluation each advertisement suggestion gets based on selected features of the advertisement itself,
advertiser and success of their campaigns in the past and, of course, the amount that the advertiser is willing to pay in order to get his advertisement reach users.
The formula behind the final Ad rank consists of two elements
</div>
[[File:Ad_Rank_Formula.jpg]]

- '''the bid'''
* maximal sum of finance offered by the advertiser and

- '''quality score'''
* will be explained further in the article, but it is more complex value calculated with consideration of all related aspects of the advertisement
* the method of calculation depends on the PPC system provider, different providers measure different aspects
* is designed to show the calculated benefits of a particular advertisement
* in advance estimates the chances that the advertisement has to become a popular, often visited and overall interesting landing page (literally the web page that is being landed on after clicking the link leading to it) resulting in more income for all parties involved

== Factors in determining Quality Score ==

There are a number of factors that determine the Quality Score of a given ad. While each search engine has released directional information on the factors most important to them, presumably in an effort to guide their advertisers towards making better ads, none has revealed their formulas in detail. Below is a summary of what has been released.
* Click-through rate
* Ad copy relevance
* Landing page quality
* Landing page load time
* Geographical considerations
* Other factors <ref> Quality Score. Wikipedia [online]. [cit. 2016-01-23]. Available at: https://en.wikipedia.org/wiki/Quality_Score </ref>

= Google Ad Ranking =
<div>
Ad position is the order in which your ad shows up on a page. For example, an ad position of "1" means that your ad is the first ad on a page. In general, it's good to have your ad appear higher on a page because it's likely that more customers will see your ad. Ads can appear on the top of a search results page, on the side of the page, or on the bottom of the page.
<ref> What Is PPC? Learn the Basics of Pay-Per-Click (PPC) Marketing. Word Stream [online]. [cit. 2016-01-20]. Available at: http://www.wordstream.com/ppc </ref>
</div>

<div>
Ad position is determined by your Ad Rank in the auction. Your Ad Rank is a score that's based on your bid, the components of Quality Score (expected clickthrough rate, ad relevance, and landing page experience), and the expected impact of extensions and other ad formats. If you're using the cost-per-click bidding option, your bid is how much you're willing to pay for a single click on your ad. The quality components of Ad Rank are a measurement of the quality of your ad text and landing page in the context of what a user is searching for. <ref>Understanding ad position and Ad Rank. Google Support - AdWords Help [online]. [cit. 2016-01-23]. Available at: https://support.google.com/adwords/answer/1722122?hl=en </ref>
</div>

== Quality score factors - Google AdWords ==

Google AdWords slightly modifies the factors that are being considered when the quality score is being determined.

* Past clickthrough rate (CTR) for certain keywords
* A display URL's past CTR
* Account history
* The quality of a landing page
* Keyword/ad relevance
* Keyword/search relevance
* Geographic performance
* An advert's performance on a site
* Targeted devices <ref> Quality Score. Wikipedia [online]. [cit. 2016-01-23]. Available at: https://en.wikipedia.org/wiki/Quality_Score </ref>

[[File:Top-google-updates-adrank-change.png]]

== How the components of Quality Score affect Ad Rank ==

<div>
Every time someone does a search that triggers an ad that competes in an auction, we calculate an Ad Rank. This calculation incorporates your bid, auction-time measurements of expected CTR, ad relevance, landing page experience, and other factors. To determine the auction-time quality components, we look at a number of different factors. By improving the following factors you can help improve the quality components of your Ad Rank:
</div>

* Your ad's expected CTR: This is based in part on your ad's historical clicks and impressions (excluding factors such as ad position, extensions, and other formats that may have affected the visibility of an ad that someone previously clicked)

* Your display URL's past CTR: The historical clicks and impressions your display URL has received

* The quality of your landing page: How relevant, transparent, and easy-to-navigate your page is

* Your ad/search relevance: How relevant your ad text is to what a person searches for

* Geographic performance: How successful your account has been in the regions you're targeting

* Your targeted devices: How well your ads have been performing on different types of devices, like desktops/laptops, mobile devices, and tablets <ref>Check and understand Quality Score. Google Support - AdWords Help [online]. [cit. 2016-01-23]. Available at: https://support.google.com/adwords/answer/2454010?hl=en </ref>

== CPC - Cost per click ==
<div>
Specific kind auction system is being applied when bidding on specific keywords and establishing the final price that advertisers are going to pay for displaying their advertisement. As being said reviously advertisers offer not the final amount, but maximal amount they would be willing to pay. In most cases such amount is not reached, because
</div>

* the calculation counts on several advertisers competing for the same keyword
* the PPC system provider tries to motivate advertisers to make really relevant advertisements to let the users have the most pleasant experience using their internet services and therefore lowers the prices of shown advertisements with the advertiser improving quality score

<div>
Although the provider earns less per click from the advertiser thanks to the lower pricing, there is then a higher potential of significantly increased number of users clicking the link. Implementing such strategy makes a lot more sense and theoretically does not cause any harm, on the contrary it is expected to raise the level of satisfaction of everyone including the user.
</div>

<div>
The advertiser pays as much as the amount that the advertiser that is placed right below him offered initially. Such amount is divided by the advertiser’s quality score (the higher, the lower resulting price) and 0.01 $ is added at the end to make sure that no advertisement is marketed for free.
</div>

[[FileAdwords.png]]

= Facebook Ad Ranking =
<div>
Facebook ranks advertisements using Relevance Scores referring to the general Quality Score. Facebook really tries to prevent such situation that its users become too aware of an advertisement shown specifically for them. It can be caused by either
</div>
* because there has been too much advertisement shown at one point, exceeding the amount of not commercial content

* or advertisement that has not been relevant at all or is even perceived negatively and cannot serve its purpose – the user will never get interested in clicking the link because the product/service being advertises is against their belief and causes unwanted feelings
<div>
Users can – to a certain extent – hide advertisement of a same brand when their patience limit is being reached by the unwanted content that is being shown on their Facebook wall.
</div>

<div>
The Relevance score is calculated based on the positive and negative feedback Facebook expects an ad to receive from its target audience. The more positive the expectations, the higher the Relevance score. The more often people are expected to hide the ad or report it as spam, the lower the score. The Relevance score can be anything between 1 and 10, with 10 being the highest possible score. The score is updated continuously, as people interact with the ad and keep providing feedback. <ref>Facebook starts ranking ads with Ad Relevance Score. Social Ads Tool [online]. [cit. 2016-01-23]. Available at: http://www.socialadstool.com/blog/facebook-starts-ranking-ads-with-ad-relevance-score/ </ref>
</div>

== Relevance Score in detail ==
<div>
It can lower the cost of reaching people. Put simply, the higher an ad’s relevance score is, the less it will cost to be delivered. This is because our ad delivery system is designed to show the right content to the right people, and a high relevance score is seen by the system as a positive signal.
</div>

<div>
Of course, relevance isn’t the only factor our ad delivery system considers. Bid matters too. For instance, if two ads are aimed at the same audience, there’s no guarantee that the ad with an excellent relevance score and low bid will beat the ad with a good relevance score and high bid. But, overall, having strong relevance scores will help advertisers see more efficient delivery through our system.
</div>

<div>
It can help advertisers test ad creative options before running a campaign. Advertisers can test different combinations of image and copy with different audiences, and learn which combinations offer the highest relevance scores.
</div>

<div>
It can help optimize campaigns already in progress. While ad campaigns are running, advertisers can monitor their relevance scores. If a score begins to dip, it may be an indicator that the ad’s creative or audience needs to be refreshed. <ref> Showing Relevance Scores for Ads on Facebook. Facebook for business - News [online]. [cit. 2016-01-23]. Available at: https://www.facebook.com/business/news/relevance-score </ref>
</div>

<div>
As Facebook claims itself, relevance score is not the only thing that mirrors the ad performance. Advertisement serves to accomplish the set marketing or business goals and it might do that even though the advertisement’s relevance score is not one of the highest. Relevance score is being increased by the user activities that are directly related to the advertisement itself and some of advertisement may not invoke many of such actions. If users only click on the link and their upcoming actions remain out of the Facebook algorithms scope, the advertisement may just as well be serving perfectly its objective. Objectives of a marketing may vary from getting the (even negative) attention for any sacrifice required, to using quickest option of raising awareness by creating a viral advertisement up to simply persuading customers to actually order anything on the advertised website.
</div>

If the advertiser insists on getting the best quality score possibly, the server wordstream is providing several tips hot to achieve it:

* Keyword Research – Discover new, highly relevant keywords to add to your campaigns, including long-tail opportunities that can contribute to the bulk of your overall traffic.
* Keyword Organization – Split your keywords into tight, organized groups that can be more effectively tied to individual ad campaigns.
* Refining Ad Text – Test out PPC ad copy that is more targeted to your individual ad groups. More effective ads get higher CTR, one of the best ways to improve Quality Score.
* Optimizing Landing Pages – Follow landing page best practices to create pages that connect directly with your ad groups and provide a cohesive experience for visitors, from keyword to conversion.
* Adding Negative Keywords – Continuously research, identify, and exclude irrelevant search terms that are wasting your budget. <ref> Quality Score: What Is Quality Score & How Does it Affect PPC? Word Stream [online]. [cit. 2016-01-23]. Available at: http://www.wordstream.com/quality-score </ref>

= Conclusion =
<div>
Advertising campaigns can be incredibly powerful when using all the possibilities that are available for internet marketers. The dream of such advertisement is to target only customers that are very likely to react to such advertisement, bringing them what they desire or need without them even knowing about it. General theory behind such direct targeting should be highly beneficial for customers and highly profitable for advertising companies.
</div>

<div>
As the algorithms change in very short iterations to get even more effective more quickly than ever before, responding changes in economic systems should start becoming more and more visible – economic indicators of customer utility should increase slowly as well as financial turnovers on the market of e-commerce.
</div>

<div>
It is very important to set the whole system right and justly, so that everything works transparently to everyone’s satisfaction and it all depends on the intentions of the biggest companies on the market that have an enormous impact on the whole internet future development course.
</div>

= Resources =

2016-01-23T07:00:50Z

Lucie:

File:Top-google-updates-adrank-change.png

2016-01-23T06:57:21Z

Lucie:

File:Ad Rank Formula.jpg

2016-01-23T06:54:05Z

Lucie:

WS 2015/2016

2016-01-23T06:44:56Z

Lucie:

Semestral papers from winter term 2015/2016. Please, put here links to the pages with your paper. First you need to have your [[Assignments WS 2015/2016|assignment approved]].

==Simulations==
--[[User:Xkrep33|Xkrep33]] ([[User talk:Xkrep33|talk]]) 15:35, 15 January 2016 (CET) [[Maze Solving Robot Simulation]]

--[[User:Dinara|Dinara]] ([[User talk:Dinara|talk]]) 22:30, 15 January 2016 (CET) [[Aircraft boarding methods]]

--[[User:OtakarTrunda|OtakarTrunda]] ([[User talk:OtakarTrunda|talk]]) 11:48, 16 January 2016 (CET) [[Ultimatum Game]]

--[[User:Xpokl18|Xpokl18]] ([[User talk:Xpokl18|talk]]) 06:51, 17 January 2016 (CET) [[RetrieverBreeder]]

--[[User:Martin.zima|Martin.zima]] ([[User talk:Martin.zima|talk]]) 10:28, 17 January 2016 (CET) [[Lane-merge optimization]]

--[[User:Xhudj17|Xhudj17]] ([[User talk:Xhudj17|talk]]) 11:25, 17 January 2016 (CET) [[Crossroad simulation]]

--[[User:xtomp36|xtomp36]] ([[User talk:xtomp36|talk]]) 15:33, 17 January 2016 (CET) [[Load-balancing]]

==Papers==
--[[User:Xkrep33|Xkrep33]] ([[User talk:Xkrep33|talk]]) 18:14, 22 January 2016 (CET) [[System Archetypes]]

--[[User:Xpokl18|Xpokl18]] ([[User talk:Xpokl18|talk]]) 07:44, 23 January 2016 (CET) [[PPC systems, Ad Rank]]

2016-01-17T14:37:00Z

Lucie:

2016-01-17T14:12:24Z

Lucie:

RetrieverBreeder

2016-01-17T14:08:46Z

Lucie:

*'''Project name:''' RetrieverBreeder
*'''Class:''' 4IT496 (WS 2015/2016)
*'''Author:''' Bc. Lucie Pokorná
*'''Model type:''' Discrete-event simulation
*'''Software used:''' SimProcess, trial version

----

Recommended work outline:

Problem definition - a description of the situation you solve (i.e. the task)
Method - the discussion of possible solutions, the selection of method and tools for the solution, reasons for such choice (why the selected methods and tools are the best for the problem)
Detailed description of the method, including parameters, ranges, schemes, model limitations, etc. The description must be detailed enough that anybody could replicate the experiment event without your model source codes.
Results - list of results, their analysis, interpretation and evaluation.
Conclusion - how the problem was solved
Citations
Model source code (xls, spm, nlogo, mdl, etc. file)

=Problem definition=
<div>
Simulation should answer the question how many female dogs is optimal to keep for: <br>
1. making sure that all dogs get their owner <br>
2. satisfying the demand for golden retriever puppies <br>
in that order.
</div>
<br>

=Detailed problem definition=
<div>
he goal of the simulation is to simulate the whole simplified process to find the optimal amount of female golden retriever dogs owned and/or kept regarding all given variables and facts.
Goal is to only have the ideal number of breeding dogs capable to fulfill the given birth giving plan, attempt to sell as many born puppies as possible and at the same time indirectly let the owner of a kennel satisfy the demand for puppies originating from the kennel.
All puppies born in a kennel are pedigreed and their genealogical tree is thoroughly recorded.
The kennel contains 5 breeding female dogs at current state.
</div>
<br>

=Method=
<div>
When first seeing the SIMPROCESS possibilities and observing the way to show the simulation running, an idea of pet breeding simulation almost immediately came to mind. Such a simulation compound of the generating (literally generating in this case) an entity - puppy delivery, delay - puppy growth and then disposing the entity - either finding a match with a corresponding demand (a waiting customer), offering and older puppy for lower price, or just keeping the particular one in a kennel - is exactly the discrete-event type of simulation that could be shown quite transparently, comprehensible yet clearly enough using this simulation tool.
</div>
<div>
While the simulation has been conducted, no significant restrictions were found using just a trial version of the program. Few not that necessary activities had to be cut and the rest of the simulation optimized to make sure that the limit for a number of activities is not depriving the simulation of possibly interesting results.
Model has been adapted for currency of american dollar (exchange rate set to 25 CZK / USD).
</div>
<br>

=Model=
<div>
The simulation consists of 4 processes:

* '''"Birth giving" - puppy generating'''
* '''"Growing Up" - delay activity'''
* '''"Staying" - the kennel owner decides to keep a puppy'''
* '''"Leaving" - ideally a customer picks up a puppy, non ideally puppy is left "unwanted" for a longer period of time and has to be later sold for a lowered price or given entirely'''
</div>
[[File:Xpokl18_model.png]]

<div>
Just one of the processes - the "Leaving" process - contains most of the activities used starting from the probability based division of puppy gender, customer decision making situation and handling an occasional exception - the case when there is no demand for a particular puppy and not even the kennel owner desires to keep it.
</div>
<br>

<div>
The simulation is set to be run in numerous iterations (replications). The more breeding female dogs the kennel owns, the more birth giving occasions there are. For the purposes of this simulation there is no need to simulate breeding dogs in any way, the only thing that is important is the recurrences of such events such is birth givings. It has been decided that each replication will simulate just a one litter had by one female breeding dog.
In average, female golden retriever female is capable to give birth once a year and a half when the dog's health and well being is considered a number one priority. Simulation is set to show just a one such cycle. The lasting of a whole simulation including several replications is set to be an exact year and a half. That means that the number of replications equals to number of female breeding dogs within 18 months and actual breeding dogs as en entity or a resource may now be omitted in the simulation.
</div>

<div>
The probability distribution for the demand is set to be invariable in a several runs of a simulation set period of time for a slight simplification. From a personal experience, demand for pedigreed puppies from a particular kennel changes quite a lot, yet the average remains at a very similar level, no matter how many puppies were sold in the past. It is possible and recommendable to adjust the value higher (lower) in a consequent time period - when the time simulated in a simulation passes - when the average demand grows (decreases) based on the actual demand counts have been observed and noted. The actual values are dependent on set number of replication.
Normal distribution was chosen to be calculated with.
</div>

<div><i>
*When a number of replications is changed, demands has to be modified as well. The demand is set to be around 25 Nor(25,2) customers desiring a male puppy and 30 Nor(30,2) customers desiring a female puppy per 18 months. In case of having 5 breeding dogs (5 litters per 18 months), demand has to be divided by 5 to distribute evenly for each litter.
</i></div>

<div>
The model is based on real data gathered in the stated sources.
</div>

== Entities ==

<div>'''Puppy'''</div>
- puppy born at the beginning of the simulation
<div>'''Staying Puppy'''</div>
- Dog that the kennel owner decides to keep (and in case of a female dog potentially transform into a breeding dog, but that is not part of this simulation)
<div>'''Male Puppy'''</div>
- Puppy that turned out to be a male
<div>'''Female Puppy'''</div>
- Puppy that turned out to be a female
<div>'''Grown Puppy'''</div>
- Such puppy was not chosen by any customer during customer visitations and has to be treated in a different manner to make sure that it will find its new home

== Resources ==

<div>'''Expenses'''</div>
- Every puppy costs 222 USD per average to take care and nourish in the kennel
- Puppy that survives the birth giving automatically consumes this resource

<div>'''Additional Expenses'''</div>
- A grown puppy costs additional 85 USD per average to take care and nourish in the later stages of its life
- Such puppy has to be taken care of while waiting in the kennel

<div>
Demand has been implemented as a resource being used within the visitations activity.
Normal distribution was used.
</div>
<div>'''Demand for male dogs'''</div>

<div>'''Demand for female dogs'''</div>

== Processes ==

<div>'''Birth Giving'''</div>
Golden retrievers give birth to approximately 8-12 puppies per litter, but extremes may might occur as well.
Probability distribution used is normal distribution (Nor(10,2)).
When puppy is born, it can die in approximately 8% of cases.
The rest of surviving puppies carry on to the upcoming process, which is growing up.

[[File:Xpokl18_birth.png]]

<div>'''Growing Up'''</div>
Variable expenses necessary per puppy are in average 220 USD (diet: special nourishment for puppies, vet care: vaccines, preventing of possible worm infestation).
Expenses are used in this phase, because they do not vary significantly in the whole process of growth.
Every puppy that makes into this process has to be taken care of and fed, taken care of and kept in a safe environment with its mother at least for two months since birth.
Therefore a delay activity has been implemented with a fixed time span of two months.

[[File:Xpokl18_growing.png]]

<div>'''Staying'''</div>
When a kennel owner decides to keep the puppy because of its exceptional characteristics, it is pre-selected and marked as a not for sale puppy - simulation has different development process.
The puppy can be kept for breeding or dog show purposes.
Such an exception can rarely take place, yet there is a possibility of it happening.
The possibility is set to be 0,045%.

[[File:Xpokl18_staying.png]]

<div>'''Leaving'''</div>
First thing that has to happen is a gender differentiation.
The ratio is pretty even, there is on average slightly more female dogs then male dogs.
The probability has been set to 0,47% for males and the rest for females.

After the gender recognition, puppies are let to be visited by costumers - already gender defined.
Visitation time last about one month (exponential distribution Exp(30) in days) and can last up to 2 months.
In these visitation activities the demand resource takes place.
In simulation the demand is understood as the final number of customers decided and willing to buy a puppy of some particular gender.
Hesitations and mind changing aspect were not taken into consideration,
because customers are not handled as an entity and most importantly their mind is already set.

When the resources are consumed (there is no more customers to pick up a puppy) and approximately a month passes, puppies are not bought (disposed of the desired way) and they get older. Three months age in a puppy is an age than the majority of customers with a demand for a pedigreed puppy do not find optimal any more.
Grown puppies stay in the kennel and are taken care of even further with an additional expenses (85 USD).
Expenses at this point consist of a nourishment mostly, therefore it is lower than the initial cost.

The puppy is then advertised individually and given to a customer that does not mind the slightly older age of a puppy and still desires a pedigreed puppy.
Pricing at this point is set to zero, because the price drops very quickly with age and the expenses start to exceed the possible gain, so these left-over puppies are might be eventually making a loss.
Nevertheless, the most important goal is to find them a new home and increase their chances to have a fully-fledged lifetime.

[[File:Xpokl18_leaving.png]]

=Results=

<h2>CASE N. 1 - Keeping current situation (5)</h2>

The model has been set to have 5 breeding female dogs at the beginning, in other words in once cycle (year and a half) the kennel can offer puppies from 5 golden retrievers litters in total.
In the simulation, there was 51 puppies generated - 18 male and 30 female. <br>
17 male puppies would be bought.<br>
25 female puppies would be bought.<br>
6 puppies would be left with no arranged owner, grew and had to be advertised individually.<br>
2 puppies would die right after birth.<br>
1 puppy would be kept in the kennel as an exceptional one and grow up with its mother.

[[File:Xpokl18_result1.png]]

'''Financial view''' <br>
42 puppies would be bought in total each for 600 USD = + 25,200 USD <br>
50 puppies would survive and = 50 * 220 = - 11,000 USD <br>
6 puppies would require additional expenses = 6 * 85 USD = - 510 USD <br>
Profit: 13,690 USD<br>

<h2>CASE N. 2 - One more breeding female dog (6)</h2>

In the simulation, there was 54 puppies generated - 15 male and 36 female.<br>
14 male puppies would be bought.<br>
28 female puppies would be bought.<br>
9 puppies would be left with no arranged owner, grew and had to be advertised individually.<br>
No puppy would die right after birth.<br>
3 puppies would be kept in the kennel as an exceptional one and grow up with its mother. <br><br>

'''Financial view'''<br>
42 puppies would be bought in total each for 600 USD = + 25,200 USD<br>
54 puppies would survive and = 54 * 220 = - 11,880 USD<br>
9 puppies would require additional expenses = 6 * 85 USD = - 765 USD<br>
Profit: 12,555 USD<br>

<div>
Lower earnings were achieved and more puppies have been left to grow up to the stage that demand for them dropped drastically.
Their well being is not guaranteed and a lot of additional effort would have to be given to find a new owners.
In this case none of desired benefits would be obtained.
</div>

<h2>CASE N. 3 - One less breeding female dog (4)</h2>

In the simulation, there was 38 puppies generated - 14 male and 20 female.<br>
14 male puppies would be bought.<br>
20 female puppies would be bought.<br>
No puppy would be left with no arranged owner, grew and had to be advertised individually.<br>
2 puppies would die right after birth.<br>
2 puppies would be kept in the kennel as an exceptional one and grow up with its mother.<br><br>

'''Financial view'''<br>
34 puppies would be bought in total each for 600 USD = + 20,400 USD<br>
54 puppies would survive and = 36 * 220 = - 7,920 USD<br>
0 puppies would require additional expenses = 6 * 85 USD = 0 USD<br>
Profit: 12,480 USD<br>

<div>
Even though earnings are lower, all puppies were passed off and no potential was wasted.
This option fits the requirements if the priority of the kennel owner is to take care of new born puppies
with the inevitable risk that demand may be left unsatisfied and a lot of costumers may be lost in the process.
</div>

=Conclusion=
- <div>As expected the proportion between earnings and puppy well-being at the end seems to be functioning almost every time in opposition,
but in one case conducted simulation has showed that both aspects can get worse at the same time.
Changes made in the second simulation (increasing the amount of dogs by one) have not shown to be improving neither of desired benefits.
The idea of having more breeding female dogs in order to either make earn more or has proven to be not working as expected - too many puppies did not get sold and less money was earned.
The third simulation turned out to be very merciful to all puppies, yet the earning were the lowest of all cases.
It seems that the current female breeding dogs amount is sufficient to have the highest possible profit when considering all dogs covered in the breeding process.
In case that the dog owner finds it really problematic to find home for too grown puppies, one if his breeding dogs should retire. Given the prioritization in Problem definition section, optimal number of breeding dog is one less than the number that is allocated in the current state, which means only 4 active breeding female dogs.

</div>

=Code=
[[File:filefile]]