Keyword Density tools are used for two primary SEO tasks:
Checking the density counts of the keywords used on your pages.
Identifying the keywords that your competitors are targeting.
Why check your Keyword Density?
There has been widespread discussion on the ideal keyword density for the primary terms used on a single page. This ranges from 3% up to, and over 15%. However, it is agreed that keyword density is used by search engines in their ranking algorithms and does affect the a page's ranking.
Checking page keyword optimization can be easily performed with a keyword density tool.
Competitor Data Mining
Keyword density tools also make it extremely easy to identify the search terms that your competitors are using on their pages, and more importantly the search terms they are targeting. With the keyword density tool, you can easily see exactly where each term is used on a page, the number of times the term is used, if the term appears in the meta tags or links, and if the term is used in heading tags.
The keyword density tool:
loads the specified url
extracts all possible word combinations to create a list of search phrases
cross references the extracted phrases with the Keyword Discovery search term database.
The density report enables you to quickly identify the frequency of popular search phrases used on your own web pages. In addition, by using the density tool on your competitor's pages, it can provide valuable insight as to the search terms your competition is targeting.