Understanding how much a keyword will profit you as the #1 result is good, but you also have to be able to determine how difficult it will be to reach that level. You will need the SEO for Firefox plugin or another tool that allows you to check pagerank and linking base will be required. A great domain referred to me by a fellow Hubber (JAnderson99 - see comments) will prepare a list of the top ten results for any given search term as well as each sites Pagerank, page authority, domain authority and domain age. You will also be able to see if your website is listed in DMOZ or Yahoo, and the listings will also tell you exactly where the domains use the exact keyword (in the title, in the web address, in the description and as an H1 tag). All of this information is provided by OpenSiteExplorer, but you can find this handy tool at the following address: http://www.webtistic.co.uk/keyword-competition-tool/

Manual Competition Research: Input the keyword you are planning to target into a Google search. Go through the results on the first page and check the page rank and linking base of every website. You will also want to look at the content contained within the webpage, checking for it's relevancy, length and value. You will usually want to avoid competing with a domain that is any higher than pagerank 3 if you don't plan to do a great deal of link building or if you don't already have a high ranking domain of your own, but exceptions can be made if the result fails to mention the keyword in the title of the page or within the actual web address itself. You might want to use these methods in addition to using Webtistic's tool (mentioned above), as this will give you a better idea as to what you are going up against.

So what does all this information mean?

The free tool provided by Webtistic above will give an overall difficulty rating for your keyword or phrase, and this number can be used to give you a good idea of how difficult or simple it will be to rank for any given key term. You should keep in mind that a search results page dominated by high ranking websites that fail to directly address the keyword sufficiently can be surpassed by a page of much lower page rank, so it is important to view the website for yourself or at least make note of the areas that the keyword appears via Webtistic's tool.

Some individuals unknowingly use the 'competition' level in Google's Adwords keyword tool as a means of determining the difficulty of a keyword, but this value is designed for webmasters who are interested in purchasing pay per click advertisement space under a given keyword and is not relevant to SEO.

Determining the difficulty of a keyword or phrase is the most important aspect of keyword research, and should probably be done prior to estimating the potential profits. If you have decided on an article topic, simply document all of the ways someone might search for this as well as it's cousin keywords via the Adwords tool and make note of these. Check the difficulty of the keywords you are considering as well as their potential profits; both of these amounts can be compared to determine if the lessened difficulty of a keyword will be worth the lessened profit potential or vice versa.

Until you've targeted a couple keywords and actually seen the amount of work required by you in order to appear as one of the first results, it will be somewhat difficult to realistically determine which keywords will be most beneficial to you in terms of money earned and time spent. By continuously experimenting and working towards creating a better or more profitable webpage with these ideals in mind, you will begin to notice that much less effort is required on your part and the process of keyword research will begin to feel more natural.