Let me add one additional comment.
I am not suggesting that you IGNORE on page optimization because I still believe in it. It just has very little importance compared to link building.
The rule I follow for on page optimization is I choose 3 key phrases that I want to optimize for and make sure they exist in my title tag. Then I spend 50% of my time link building for key phrase 1, 30% of my time on key phrase 2 and 20% on key phrase 3.
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