A quick refresher on the definition of a "keyword": the phrase or combination of words that you type into a search engine, such as Google, are "keywords". Websites are often optimized to utilize a specific set of words or phrases. This yields site traffic that is more targeted and relevant.
Google's Penguin and Panda updates have many business owners thinking that they can simply stop paying for SEO projects related to keywords. If Google only cares about organic referrals from quality sources then what purpose does keyword optimization serve?
The main focus of the Penguin update was to stop keyword spamming. No longer can elaborate link schemes or keyword stuffing practices launch a site to the number one ranking. Shortcuts that undermine SEO practices have been eliminated. Google has only further legitimized the SEO industry and put black hat professionals out of business.
Campaigns now must be more organic, or at least appear to be. Instead of only relying on ten solid keywords throughout an entire campaign, a company must include alternative yet similar keywords, branded keywords and a variety of contextual cues to increase relevancy. Google will start looking at the concentration of any one keyword and penalize a website that they think is using it too much. However, keywords are still used as a flag to indicate that a website is a good match for a search query.
A quality website with fresh content that uses a variety of strategic keywords to help Google put the right eyes in the right place will reign supreme. The best technique is to focus on a targeted audience, know their search behaviors, and pair the content and keywords to what they are looking for. Concentrating efforts on a specific audience will not only make campaigns more efficient and save money, but it will also increase the page authority on that topic and improve the overall online reputation for the site.