Basically I want to know whether or not the competion per keyword statistics that the 'Google Keyword Tool' shows for each keyword, is that for 'Pay Per Click' competition or for 'Organic Page Rank SEO' competition as I imagine both may differ substantially, no? Many thanks
Google's tool is for their Adwords (PPC) advertisers, so it shows the advertiser competition and not the amount of competing sites (organic). But then again the number of competing sites isn't the best way to determine competition, there are keyword tools that supposedly give you the competition, but still the best way is by manually checking (MarketSamurai, TrafficTravis, Firefox addon SEOQuake)
the best way to measure competition is to see how many sites compete in anchor or intitle. Type the following in google search: intitle:"keyword" - if it results in million pages that means the competition is high .
Yes both differ substantially in some cases, but often times a high CPC keyword with high advertiser competition is directly paralalled with high SEO competition of people trying to take advantage of that high CPC market. It's the keywords with the high PPC competition, but low SEO competition you should be after