The Google keyword tool is part of the Google webmaster tools set that they allow you to use for free. You may use the non-sign up version, but it is not as good or as detailed as if you sign up with Google AdWords. There is no charge to sign up, and you are not obligated to place any adverts, but you are given access to their Google keywords tool, and this is what may be used to help you predict your income.
What does the keyword tool do?
You put in your keyword and it comes up with a long list of other possible keywords that are related to it. It separates the keywords out into categories, which makes it easier to pick keywords that are applicable to your campaign. It also shows you the traffic potential of each keyword and the amount of money that people are bidding per keyword.
What amounts are people bidding?
You can use this tool to predict your earnings on Adsense. If people are bidding a lot of money for certain keywords, then it stands to reason that if you attract adverts on your website that cater to those keywords, then you will receive more money per click when your traffic clicks on your adverts.
This does not translate into definite earnings, as there are a lot of factors to consider. But, the fact is that if you are aiming to host high paying keywords via your Adsense affiliate adverts, then there is a higher chance of you being paid more per click than if you are aiming to host keywords that have lower bid prices.
How much traffic potential is there?
If the keywords you are trying to optimize your site for have a very high traffic potential, then it stands to reason that you are going to get more traffic if you use them. Just as the factor explained in the paragraphs above, this is not a certainty. For example, if a keyword has a lot of traffic potential, then there may also be a lot more competition too.
However, if you use keywords that have a lot of traffic potential, then you are logically more likely to get more traffic than if you use keywords that have a very small traffic potential.
Do not trust lead ratios
This is the sort of math that is created and used by people who have no idea about statistics in the slightest. Such a ratio will say that if you get 100 visitors per week thanks to the keyword “Apple” and 13 of them are buyers/leads, then if you find a keyword that has more visitors such as “Mac” that gets you 200 visitors per week, then you will get 26 buyers/leads per week. This is poorly formed mathematical nonsense that is an accurate predictor of nothing.
Putting the pieces together for a usable formula
Historic records and research are going to help you the most when it comes to predicting future earnings. You cannot accurately predict any sort of earnings or traffic, even if you have a very sophisticated model/equation. But, you can give yourself a vague idea using these elements. This list assumes that you have an eCommerce website that needs buyers to turn a profit and assumes that you are only getting your traffic from search engines.
Your keyword search volume
Your Google search engine results page position
Your search engine results page click through rate
Your visitor conversion rate
Your long-tailed keywords
The keyword search volume may be found using the Google keywords tool, so that is one way in which it helps you predict your income. It will not help you figure out the effect of your long-tailed keywords because it will probably show them as not active. They are probably making an impact on your website traffic, but not in a very direct way, so the keyword tool is of little help in finding out what long-tailed keywords are the best.
Other than that--you need to put together that elements listed above if you want to get a vague idea of your earning potential. You may add a monetary number to this if you have a mean purchase amount. Using average purchase amounts will often yield incorrect results.
Put targeting before keyword popularity
The keyword tool may show you which words are the most popular, but that does not mean they are going to convert the most people. Use the tool to help you pick keywords that only your potential customers or clickers are going to choose. If you do it that way then you are more likely to get more conversions and more likely to make more money. Remember that a keyword may be popular for a number of reasons, and many of those reasons may have nothing to do with your website topic.