How does an experienced SEO professional identify competitor keywords?

Online Marketing Body of Knowledge from OMCP

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How does an experienced SEO professional identify competitor keywords?  Answers must include: Definition of terminology, Importance of the concept or process, and the Process of how a professional marketer approaches the practice. Please start your answer so it can stand alone as a sentence/paragraph. For example, “SEO keyword analysis is the process of…”

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The identification of keywords used by competitors can yield insights on keyword phrase opportunities, value, and competition levels.  This is typically accomplished through use of tools built into advertising platforms (like Google AdWords and Bing Ads) and commercial tools (like Moz Open Site Explorer and SpyFu).  Resulting tactics can include natural search optimization for your competitor’s most expensive keywords testing for conversion rates for phrases used by competitors, and development of new target keyword phrases that competitors may not have discovered.

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