Keyword Effectiveness Index (KEI )

The Keyword Effectiveness Index (KEI ) is a measure of how effective a keyword is for your web site. The derivation of the formula for KEI is based on three axioms:

1. The Keyword Effectiveness Index (KEI ) for a keyword should increase if its popularity increases. Popularity is defined as the number present in the "Count" column of Word Tracker. This axiom is self-explanatory
2. The Keyword Effectiveness Index (KEI ) for a keyword should decrease if it becomes more competitive. Competitiveness is defined as the number of sites which AltaVista displays when you search for that keyword using exact match search (i.e. you should use quotes around the keyword). This axiom is also self-explanatory.
3. If a keyword becomes more popular and more competitive at the same time such that the ratio between its popularity and competitiveness remains the same, its KEI should increase. The rationale behind this axiom requires a more detailed explanation. The best way to do this is to take an example:

Suppose the popularity of a keyword is 4 and AltaVista displays 100 sites for that keyword. Then the ratio between popularity and competitiveness for that keyword is 4/100 = 0.04.

Suppose that both the popularity and the competitiveness of the keyword increase. Assume that the popularity increases to 40 and AltaVista now displays 1000 sites for that keyword. Then the ratio between popularity and competitiveness for that keyword is 40/1000 = 0.04.

Hence, the keyword has the same ratio between popularity and competitiveness as before. However, as is obvious, the keyword would be far more attractive in the second case. If the popularity is only 4, there's hardly any point in spending time trying to optimize your site for it even though you have a bigger chance of ending up in the top 30 since there are only 100 sites which are competing for a top 30 position. Each hit is no doubt important, but from a cost-benefit angle, the keyword is hardly a good choice. However, when the popularity increases to 40, the keyword becomes more attractive even though its competitiveness increases. Although it is now that much more difficult to get a top 30 ranking, spending time in trying to do so is worthwhile from the cost benefit viewpoint.

A good Keyword Effectiveness Index (KEI ) must satisfy all the 3 axioms. Let P denote the popularity of the keyword and C the competitiveness.
The formula that I have chosen is KEI = P^2/C, i.e. KEI is the square of the popularity of the keyword divided by its competitiveness. This formula satisfies all the 3 axioms:

• If P increases, P^2 increases and hence KEI increases. Hence, Axiom 1 is satisfied.
• If C increases, KEI decreases and hence, Axiom 2 is satisfied.
• If P and C both increase such that P/C is the same as before, KEI increases since KEI can be written as KEI = P^2/C = P/C * P. Since P/C remains the same, and P increases, KEI must increase. Hence, Axiom 3 is satisfied.