Another abbreviation from the land of SEO or Search Engine Optimization. The first place ot start is what does TF-IDF stand for. TF-IDF stands for "Term Frequency-Inverse Document Frequency". This is a technique that came out from Hans Peter Luhn in 1957 came up with the Term Frequency part. In 1972, Karen Spärck Jones, conceived the Inverse Document Frequency (IDF) portion. So, this is nothing new in regard to existence. What is new is how the search engines use this information to help in the calculation and rating of your website pages.
The key to TF-IDF is all about data analytics and statistics. The more a word appears within a given document. This shows the statistical importance of any given word. Each page of your website should have a focus word you are trying to be found for. Often, you will have several of these focus keyword phrases within your document. The way Google and other search engines work is they look at not at a single page but the overall structure of your website. You wish a page will rank as well as your site to rank equally high.
Let's say you want to be known for "Best SEO in Michigan City, Indiana" for your website as that is a key feature you offer. The search engines will do the following as part of the Term Frequency:
This gives some logic to your site pages but not the overall answer. The overall answer comes from the inclusion of the Inverse Document Frequency.
Here the system removes words like "in" but not the more relevant words from the calculations. Within your document and all pages of your site, these not-so-important words will be removed from factoring into the overall information. As John Mueller from Google's webspam team has stated, "this is a fairly old metric and things have evolved quite a bit over the years. There are lots of other metrics, as well."
Based on what Google has said, TF-IDF is a factor for knowing the context of a page. It is not a large factor but still needs to be thought of as you build the pages and content for your site. Another word many people know TF-IDF as is "keyword stuffing." That's genuinely an easier word to remember but is the difference between an executive overview and an employee overview. The executive gets an understanding of something at the highest and furthest away location while your employee works in the gritty area and is doing the actual work.
The key to understanding TF-IDF is to know that (1) it exists, (2) that you need to factor in other components of the search algorithms, and (3) you should look at the keywords you are targeting but not put all your efforts on this one item. SEO has many more factors that are looked at. You need to focus on all of the areas and not all areas.