When I finally figured this out a few years back, I was kicking myself for not seeing it earlier: the conventional SEO approaches to keyword research were missing the big picture.
Isolating and targeting high traffic keywords is all well and good, but most of the value actually exists in the tail, which certainly shouldn’t be ignored on the basis the keywords are “uncompetitive” or have low traffic volumes.
An effective strategy was to trawl through your logs, find all the minor keyword terms people have used to find your site, then use those keywords and semantic variations as a basis for new articles. Rinse. Repeat. It wasn’t called the Long Tail back then, but the value was obvious – if you wanted to catch more fish, it was wise to build a big trawling net and cast it wide. The strategy still works a treat today.
Mike Levin has a new service called HitTail (I have no association with this site) but I think his Flash presentation on the SEM Long Tail is a great demonstration of this concept. The service looks good, too.