Keyword Density:

Keyword density is the number of times a keyword appears on a page, versus the total number of words. It's usually expressed as a percentage.

An excellent way to see the relative importance of any given keyword on a page, is via a keyword density cloud. This shows all the keywords found on a web page, and applies different font sizes to show which ones appear the most (or least).

With a keyword density cloud, you get an instant feel for how a search engine will determine what a web page is about.

I use the best free keyword density cloud tool on the web. It's part of SEO Quake, and enormously useful add on to the Firefox browser (now also Chrome) that does everything you need in one place.

Once SEO Quake is installed, the Keyword Density link appears at the bottom or far left (depending on how you intalled it) of SEO Quake's list of options. Click the link and you'll see 4 keyword density reports, and an keyword density cloud (like the one ot the right) appear on the right hand side of the screen.

This keyword density tool is an excellent way to achieve the following...

Find out what keywords a page already contains, see which ones stand out, and adjust the meta keywords, description, title and h1 tags accordingly
Make sure your page content is consistent with the way you want search engines to view the page
Spot problems with keyword density (e.g. too high a density score for a specific keyword can be as damaging as too low)

There is no one correct keyword density score. What matters to the major search engines, is that your page content appears to be natural.

If a page contains nothing but a list of keywords, it probably won't do well in search engines no matter what the keyword density is.

There are exceptions to this rule, and all of them can be explained by other factors. For example, useful content may be removed from a page, but old links from high value sites could still exist.

I've seen recommendations in forums and on blogs that claim the ideal keyword density for a particular phrase is 5-20%. Others claim you should never go above 3%.

This is all nonsense. Keyword density is one factor among many, and no magic score will rocket you to the top of Google, Bing or Yahoo Search.

By the way, a keyword density of 20% means that every fifth word on a web page is a specific keyword. Imagine a page where every fifth word was 'lead generation'. I doubt a search engine will reward such a site. This is especially true for a new or otherwise unranked site.

I'll go so far as to say you're better off forgetting about the percentage figure, and focusing on the visual cloud. If the right keywords stand out, you've done your job.

If none of your keywords stand out in the cloud, or the wrong words are too prominent, you need to think about likely causes. For example...

Too many keywords on the page
Haven't used all the keyword options open to you (e.g. title, description, keywords, h1, bold, italic, anchor text and the img tag's alt attribute)
Not focusing on the most important keyword

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