Every profitable paid search marketing campaign starts with research. In fact, without proper research, the chances of making money from any online marketing campaigns are very slim.
Free Keyword Tool
You start with the free keyword research tool by Google. Take the domain name of your site & you type it in, then you will get a list of keywords which are related to your site. Pick the keywords which are related your offer, also make sure these keywords have enough searches per month.
Related Keywords
Now you take the domain names of your direct competitors & you type them in, then you will get another list of keywords. Here is where you will start to find very relevant keywords which you missed out. Take those keywords, add them into your website. You then create similar pages with different keywords & topics.
Keyword Spy Tool
There are a lot keyword tools which spy on your competitors, I personally prefer KeywordSpy over all the others because it is simpler to use & the interface it so much neater than most others. You can use the trial version if you do not want to pay for the monthly subscription.
Keywords & Ads
With Google keyword tool, you can get related keywords, however, with KeywordSpy, you get the exact keywords & ads which your competitors are using. This is the fastest way to get the most targeted keywords that convert best.
Look at the history of your competitors, if you notice that they are using a particular keyword or ad for at least 14 - 30 days, you can be sure that keyword is at least doing alright for them. Nobody will keep running a losing campaign, right?
Summary
Using your competitors current data is the fastest way to find keywords which are worth testing. First thing, do not copy their ads exactly, learn the style of writing & improve on it. Next, always test those keywords because what works for them may not work for you & vice versa.