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A key phrase is a string of words that best describes your products / services.
For Example:
If you own a doughnut factory that specialises
in fresh jam doughnuts a good choice
of key phrase would be 'Fresh Jam Doughnuts'.
When it comes to SEO ( Search Engine Optimisation ), your key phrase choice is paramount, as targeting the wrong key phrase can mean that your website receives little or no traffic, or at best, receives traffic that is not targeted resulting in a low conversion ratio.
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See Keyword Frequency