• Conversion Rate - the percent of users searching with the term/phrase that convert (click an ad, buy a product, complete a transaction, etc.)

• Predicted Traffic - An estimate of how many users will be searching for the given term/phrase each month

• Value per Customer - An average amount of revenue earned per customer using the term or phrase to search - comparing big-ticket search terms vs. smaller ones.

• Keyword Competition - A rough measurement of the competitive environment and the level of difficulty for the given term/phrase. This is typically measured by metrics that include the number of competitors, the strength of those competitors' links and the financial motivation to be in the sector. SEOmoz's Keyword Difficulty Tool can assist in this process.

Once you've analyzed each of these elements, you can make effective decisions about the terms and phrases to target. When starting a new site, it's highly recommended to target only one or possibly two unique phrases on a single page. Although it is possible to optimize for more phrases and terms, it's generally best to keep separate terms on separate pages, as you can provide individualized information for each in this manner. As websites grow and mature, gaining links and legitimacy with the engines, targeting multiple terms per page becomes more feasible.

The Long Tail of Search

The "long tail" is a concept pioneered by Chris Anderson (the editor-in-chief of Wired magazine, who runs the Long Tail blog). From Chris's description:

The theory of the Long Tail is that our culture and economy is increasingly shifting away from a focus on a relatively small number of "hits" (mainstream products and markets) at the head of the demand curve and toward a huge number of niches in the tail. As the costs of production and distribution fall, especially online, there is now less need to lump products and consumers into one-size-fits-all containers. In an era without the constraints of physical shelf space and other bottlenecks of distribution, narrowly-target goods and services can be as economically attractive as mainstream fare.

This concept relates exceptionally well to keyword search terms in the major engines. Although the largest traffic numbers are typically for broad terms at the "head" of the keyword curve, great value lies in the thousands of unique, rarely used, niche terms in the "tail." These terms can provide higher conversion rates and more interested and valuable visitors to a site, as these specific terms can relate to exactly the topics, products and services your site provides.

For example:

In the scenario in the table above, the traffic for the term "men's suit" may be far greater, but the value of more specific terms is greater. A searcher for "Hugo Boss Men's Suit" is more likely to make a purchase decision than one searching for simply a "men's suit." There are also thousands of other terms, garnering far fewer monthly searches, that, when taken together, have a value greater than the terms garnering the most searches. Thus, targeting many dozens or hundreds of smaller terms individually can be both easier (on a competitive level) and more profitable.