Targeting the correct keywords and the correct amount of keywords is dependant upon many factors and should be done carefully.

How Large Is Your Site?
The size of your website as a whole plays a large factor in the decision on which keywords to target and how many to target. Below you can see a great pyramid structure that Brett Tabke, the owner of Search Engine World, has made. This pyramid illustrates the correct structure that a well themed website should follow, including the way that the keywords should be targeted.

Referring to this pyramid, you will notice that there are 5 levels to the website laid out in the pyramid. The Index page branches off into 4 "sub topics", which is basically the different topics covered on the website. If your website is this size, which equals 61 pages when added up, then you would have the ability to target almost 20 keywords with the ability to strongly reinforce them with other pages within the sub-section. If the page did not need to be reinforced then the number of targeted keywords would jump to somewhere around 30 variations of keywords.

If your site only contains one of these sub-topics, then the number of pages on your site comes down to 16 pages. This results in the number of targeted keywords being brought down to between 5 to 10 keywords.

A good ratio of keywords to pages is: For every one page, target two keywords.

No more, no less.

How Broad is Your Market?
The broadness of your market can play a role in how many keywords that you target. If your target audience is "Internet Services", then this should be the only keyword that you target. Throughout the website you should use this keyword, which will in turn make the website stronger for that particular keyword phrase. There is no need to refine "Internet Services" down to "web design" if that is not what your company is offering.

How Competitive is Your Market?
When your main target keyword is super competitive it can have a direct effect on the number of keywords that you target. For a small to medium size website that is attempting to target a super competitive keyword, the main focus of the website should be directed on this main keyword. This will direct the efforts of the sub-pages to be strength builders of the index page, which will in turn build the SEO strength of your website for that particular keyword.

How Do I Decide Which Ones To Drop?
Short Answer: Get rid of every keyword that isn't in your content.

This is something to remember: whether your website has 100 pages or 20 pages, your keywords should be variations of the keywords that you use on the main index page. As pointed out in the pyramid, the Index page should contain your general or broad keyword terms. The keywords in the sub-topics and pages to follow should be variations of that general keyword that is more specific and defined. For example, if your website uses the keyword "cars" on it's Index page, it may use "Mitsubishi Cars" on a sub topic page, and "1988 Mitsubishi Cars" on the next level down.

This pyramid of levels and keyword levels will have many positive effects on your website.

Where is the Target Audience?
If your website's theme were designer clothes and apparel, then naturally you would want to target the keywords "designer clothes" and "apparel". Before doing so, you should visit some of the search engines and use some of the keyword tools to see what people are searching for.

After all, there is no use in someone coming to your site that didn't want to be there in the first place.

If you visit Google and search for your targeted keyword "apparel", and websites are coming up that are irrelevant to your website, than you should think twice about targeting this keyword. Dig deeper. If you utilize some keyword tools like Word Tracker, or the GoTo keyword suggestion tool, you may realize that the keyword "apparel" is not the keyword that you want to target. One keyword eliminated. If you can reach your target audience with this one keyword, then concentrate your efforts on this one keyword.

Repeat this process for all of your keywords to insure you are reaching your target audience and not wasting precious content by targeting the wrong keywords.

Why Is This So Important?
This process of choosing the right keyword combinations is vital to your website from multiple aspects. If you target the wrong keyword combinations you risk being penalized by the search engines, losing business to your competition, and reaching the wrong audience.

Targeting the wrong keywords can be compared to running an advertisement for the NRA in a Christmas edition of the Home & Garden magazine. What kind of results will you see from that ad campaign? It may seem like a great idea to target a highly searched keyword, but what will the results be? Your website may receive good rankings for that off-topic, highly searched keyword, but you will see a very low click through ratio (CTR) and conversion to sales.

What happens to the targeted traffic that you want to be capturing? It is distributed between your competitors' websites, giving them the upper hand in the online market. This means you are losing out on traffic, which means you are losing out on sales, which means you are losing out on revenue. Not pretty.

The search engines have picked up on the trend that some practice of including keywords in the Meta keyword section that are not in the content, and have begun to either penalize discard that particular keyword. As pointed out at Search Engine World, "Infoseek's latest design for ESP: Extra Search Precision, will all but throw out any keyword found in a Meta tag that is not present on the page." If this is the case, and you have decided to only use keywords that are not in the content, how will your website be found?

So the question shouldn't be "Why is this important?", but "Can I afford not to spend the time and money to choose them correctly?"