As most people know by now, Google’s algorithms are continuously updated. If you have low-quality content or web pages, then you will start to lose rankings. The problem, however, comes when you’re trying to determine if your site is suffering from an algorithmic penalty or if the better content is simply outperforming your own content.
You can go to webmaster tools to find out if Google thinks there is keyword stuffing or keyword cloaking on your site (you will get a notification and then you can start investigating the problem from there). Checking your Google webmaster tools will highlight any crawl errors or other problems that you can start to solve yourself.
In 2012 alone, over 600 algorithmic changes were rolled out by Google. So, if you’re affected by an algorithm penalty, it’s not always as clear-cut. Google will often issue a news release if they have a big update that will impact many websites, such as the Panda algorithm, which is targeted at quality content, for example.
In general, if your website isn’t ranking where you want it to rank, it’s probably algorithmic. It’s always possible for you to check out what higher ranking web pages are doing and to tweak your own content and website so that you can improve your own rankings. As you change your site, the algorithms will reprocess the site and it can continue to rank better.