The key to choosing the best keywords is to choose keywords that are properly targeted, high volume, and low competition.

Targeting

When choosing your keywords, choose keywords that will give you prospects that are likely to buy your product. For example, if you are selling Oriental Rugs, the keyword “rugs” would be an okay keyword. The keyword “oriental rugs” would be better, and the keyword “buy oriental rugs” would be ideal.

Search volume

When choosing a keyword, you'll want to know how many people are searching for that particular keyword. The easiest way to do this is to use the Yahoo Search Marketing keyword suggestion tool. This tool will tell you how many people on the Yahoo network searched for that keyword last month.

Another good tool is the Digital Point keyword suggestion tool, which will give you data from the Yahoo network and from Wordtracker.

Competition Level

The competition level for a particular keyword can be a little tougher to determine. For PPC marketing, the Yahoo View Bids Tool is very helpful. This tool will show you what advertisers are bidding per click for a keyword. This tool is also helpful for SEO, but there are other ways to determine the SEO competitiveness of a keyword.

Using Google, you can get quite a bit of data that can help you determine how many websites have been optimized for keyword, and how well they have been optimized. Use Google to check on:

How many sites are returned for “keyword”
How many sites are returned for “allintitle: keyword”

Then, use Yahoo or MSN, to see how many backlinks the top ranked sites for the keyword have.