Bank Links or Page Optimization?

In a category I am working on to reach a higher position, the number 1 site has 0 page optimization. Their success has to be almost entirely based on back links. So is the only way to topple such a giant is to collect back links as well on top of a well optimized page?

basically, yes. On page optimization alone will not overcome many quality backlinks without optimization.

I've seen good optimized PR3s ranked fifth behind a PR6 ranked fourth with not so good optimization. This was in the competitive real estate market.

The optimization process was the standard analysis. The PR 6 competitor had been using several variants of about 4 keyword combinations. The highest value keyword was not being highlighted near the top of the page. Basically they were using their impressive PR6 to push 4 main keywords.

So we designed a page that focused only on the highest valued keyword. That's was the sole theme of the page.

This methodology had been working across all Internet marketing sectors for years. When Google went through their last change, the site gained positioning. The competitor had a dip.