I try to weigh the monthly search query volume against how competitive the keyword phrase is. I use Google's external Adwords keyword tool for researching popular keyword phrases and their associated monthly search query volume. Be sure to use match type = EXACT.

Then I use the results counts at Google.com when I search for each keyword phrase using a variety of operators to help gauge how competitive the phrase is. You cannot simply search for a keyword phrase without quotes and base the relative competitiveness on the number of results. You should be checking to see how many pages have exactly that phrase in the content.... how many pages have that phrase in the content AND in the title... how many have that phrase in the content and in the URL... how many have that phrase in the title and the URL... etc. For example:

"my keyword phrase"
"my keyword phrase" intitle:"my keyword phrase"
"my keyword phrase" inurl:"my keyword phrase"
intitle:"my keyword phrase" inurl:"my keyword phrase"
"my keyword phrase" intitle:"my keyword phrase" inurl:"my keyword phrase"

I would rather rank on page 1 with little or no link building for a phrase that has a low search query volume but brings me 20 visitors per month than to rank on page 9 for a phrase that gets a buttload of searches but for which I have no chance of ranking on page one without thousands of quality inbound links (and therefore have no chance of getting ANY visitors).

Aside from using helpful tools, you base it on your own judgment as well, if whether a certain keyword is best suited for your site and that would really be useful for those who are searching for that specific term.

I will choose http://www.wordtracker.com .This site will give exact competitor details.

Now there are tools available for choosing the key word.The best tool that I know of is called Wordtracker and is a huge database full of keyword phrases with information about how many times they are searched on per day and how many other sites are competing for those keywords. It is to be noted that his is the number of web pages in the search engine that contain this exact keyword phrase.

The two most easiest method of choosing keywords:

1. Target High Traffic Keywords for your Main Page
2. Target Medium or Long Tail keywords for your inner pages to draw more traffic.

This way you can accumulate the best of the two sides.

N.B. Getting to rank for competitive keywords take time thus its always advisable that you target medium or low traffic keywords.

Originally Posted by chrishirst

KEI is a meaningless metric based on erroneous "theories"

What about wordtracker KEI3?

It's simple. Use the Google Keyword Tool to find terms which have a good search volume, then check to see how competitive those terms are in the SERPs. (use a toolbar like SEOQuake)

Pick terms with good search volume, but not too competitive.

As for looking at the cost-per-click for advertisers, this isn't a good metric to go by: I've known of a lot of companies that have had marketing campaigns run for them targeting useless keywords, which is how the cost is decided - the competition, not the result.

When it comes to keyword research, I first look at my competition using SEO Elite and asses which ones are they targeting. I choose the ones that are less competitive but still have good volume of searches.

Google adwords is useful for getting a good keyword to target.

Choose the keywords which are not having very much competition but think of the use-side and then target the keywords accordingly.

KEI assumes that the "page count" ("Results x - x of about x,xxx for [word]") returned by a search engine query is an accurate count of "competing" pages. It also assumes that the number of searches performed is also accurate.

Neither of these cases are true so how can an calculation based on erroneous data be considered valid.

I use google adwords and google trends and based on their results i chose most suitable keywords.

i always use google adwords to choose keywords before i start a new blog

If a site is new, I would be searching for a long tail keywords and those non-competitive. Once it establish itself, will try to aim for those keywords with search volume.