It’s easy to take shortcuts and miss the mark with keyword selection, especially during the early phases of search engine optimization projects. Keyword research is one thing; keyword selection is the tougher of the two disciplines. Counter your desires and the appeal of high-traffic keywords with the reality of your website and what it can honestly support.
Do you have an established website that others envy? Great. You may qualify for the top echelon of a relevant keyword crop. Most websites, however, can’t appear in the most prized ranking positions for all of the most profitable search terms. As a result, online marketers must think seriously about ideal keyword possibilities, analyze the data and settle for a range of keyword phrases. Find your sweet spot and shoot for that, not the moon. Here are 10 factors to keep in mind when it’s time to target keywords for your SEO efforts:
1. Get conversion data from paid search. Distinguish the dogs from the gems. Keep in mind that the most valuable organic keywords may take considerable time to achieve.
2. Play off of your domain name — if it’s a huge asset. Make sure your roster includes keywords that are reflected in your domain — if you selected one rich with keywords.
3. Consider your website's age. Older sites naturally build credibility with search engines. As a result, you may do well with more competitive keyword phrases.
4. Think relevancy. How likely is someone to convert when she uses a phrase to reach your website? Do you have what she needs? Do you have a first-class design? What’s the best offer she’ll see?
5. Scour your website analytics. If a keyword phrase already attracts traffic, consider it for the mix — as well as any close variations.
6. Look closely at your rankings. If a keyword isn’t even in the top 50 today, your website better have some great advantages in its ability to succeed, such as a powerful domain or a website architecture filled with text navigation and page headings.
7. Evaluate the quality of inbound links and anchor text. Are other websites using those keywords when they link to you? If so, ask them to edit the links.

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Murray, A nice post on keyword research and related analysis. Conversion data relevancy plays vital role in effective selection.
Glad you liked the piece - and seem to appreciate the complexity of keyword choices. Wish you well with your endeavors.
Nice article Mike,
Another very effective technique of keyword research is to examine the phrases your visitors are using on your internal site search. You can do this by examining your logs directly, or your site search may come with some reporting, or many analytics packages can be set up to give you this information too.