Generating profitable, traffic pulling keywords is both an art and a science. It takes time and effort and in order to stay competitive continual tweaking.
Remember the definition of a keyword is word used by a search engine in its search for relevant Web pages.
Here's a step-by-step guide to choosing good keywords:
Keywords can be split into two main groups, short tail keywords and long tail keywords, or broad keywords and narrow keywords.
The term "long tail" was coined by Chris Anderson and is used to describe the strategy of targeting less-competitive niche markets rather than the hugely competitive broad keywords. A long tail keyword is something like "Small Business Web Design" while a short tail keyword is something like "Web Design".
When you compare the two keywords, "Web Design" has about 30 times as many competitors as "Small Business Web Design" but "Web Design" also gets far more searches each month. A small number of broad terms such as "Web Design" and "Marketing" account for a large proportion of searches but an equally large proportion of the searches are made up of millions of more specific search queries such as "Small Business Web Design".
You may be wondering why anybody would want to target hundreds or thousands of keywords which bring only small traffic. Well the answer is simply that there is less competition so you can rank on the first page of Google for long tail keywords far easier than ranking for short tail keywords. Yes, they don't bring a lot of traffic separately but if you target lots of long tail keywords you can get lots of easy traffic. Not everybody is capable of ranking highly for highly competitive keywords but anybody(!) can rank for long tail keywords.
Another benefit of long tail keywords is that the visitors convert amazingly well to sales and ad clicks. The visitors searching for long tail keywords know exactly what they want, be it "Small Business Web Design" or "Half Price Armani Suits", they know exactly what they want and hopefully you can provide it to them.
To put this into numbers, in general my websites might make $5 per 1000 impressions but from long tail visitors I can earn $100 per 1000 impressions, that's 20 times the revenue if the traffic is equal. Although admittedly the traffic is not equal, my best keywords bring in more visitors than the long tail keywords combined, but the long tail keywords still bring in nice revenue.
