Internet marketing is an intensely competitive field, with dozens of Internet marketing companies promising to enhance search engine optimization and pay per click campaigns by helping you to find the "optimal" keyword strategy. The Keyword Effective Index is a way to quantify and compare the use of different keywords based on rank and return on investment.
Review the formula for calculating KEI. One formula for KEI is to divide the square of the total searches per month by the number of competitors, which itself is defined as the number of Google results returned for a given search.
Define your variables. To help explain let's define two different variable scenarios: Keyword A - Number of searches made is 1,000 per day or 30,000 per month. The number of competing pages is 5 million. Keyword B - Number of searches made is 5,000 per day or 150,000 per month. The number of competing pages is 2 million. You can find this information using Google or Wordtracker Keyword search (see Resources).
Calculate the KEI for Keyword A. The equation is 30,000^2 / 5 million = 180.
Calculate the KEI for Keyword B. The equation is 50,000^2 / 5 million = 500.
Interpret the results. According to the KEI definition, the best keywords are those that have many searches with little competition in the search results. In general, a low KEI is preferable over a higher one. Therefore, at 180, Keyword A is a better value than Keyword B, whose value is 500. Note the numerator is an exponential function; that is, the number of keyword searches per month can change your KEI considerably.