Jared Blank writes from his experience of marketing his own blog:
The [Google] keyword program worked well for me, but be patient with results and test many different combinations of words. It took me several weeks to understand broad terms worked better for me than specific keywords. You may have completely different results, depending on your industry. I found it was not worth bidding more than a nickel for higher placement in the results page. My best-performing keywords typically ranked fifth in the listings and performed better than other words that placed higher in the results. Contact other bloggers and ask them to place a link to your Weblog on their pages. This will be even more effective if the blogger is writing about a similar industry. Don’t give up on working your house list. Place a link to the Weblog in each of your newsletters and a link to the Weblog in your e-mail signature file.