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Learn about Anchor Text to a Backlink.

How Google derives a Link’s relevance
Before we go on to conclude the importance of anchor text right now, let’s take a look at how Google derives an individual link’s relevance. Basically, there are three major ways:

Anchor Text
The anchor text is what we want to tackle today. This is the blue underlined text that is clickable and will take you to another webpage to which it is pointing to. There have been many controversies and exchange of ideas surrounding anchor text – some swear by its effectiveness, while others proclaim its death.

Recently, Google has announced that it will gradually reduce its dependence on anchor text until it has minimal effect. Lots of sources have given infographs about the future of SEO factors – and it clearly shows that anchor text is in rapid decline.

Anchor Title
The anchor title is the tool-tip text that appears whenever you mouse-over on a link. The importance and weight of the anchor title is not really as big as the anchor text – but it is one of the most visible factors describing the link and what it is pointing to.
I personally think that Google derives a link’s relevance from an anchor title too albeit not too much.

Context around the link
Click Here
The context that surrounds the link is also used to derive the link and what it is pointing to. Basically, we look at two major factors that comprise the context:
  1. Page Title – The page title is what you see at the top-leftmost part of your browser. It gives you an immediate idea about what the webpage is all about. This affects the link by the page as a whole. A link coming from a page with a very relevant title tag incurs a huge impact in the link’s quality.
  2. Content Body – The content body is the whole of the article written in the webpage – where the link is almost always placed. The upper part of the content is arguably the best link placement and should easily describe what the link is about. This is also used by Google to derive the link and where it points to.
Anchor Text’s current importance
Google isn’t there in its acclaimed ‘anchor text independence’ yet. Right now, how the system works is how it still does – varying anchor text is still the best as long as there is relevance in the words.

For example:
If you have a website that sells gift checks, building links with the anchor text “gift checks”, “gift certificates”, “gift items” will get you further up the ranks in the long run than making just focusing all your anchor texts on “gift checks”. But not having the keywords “gift” or “checks” or “gift checks” inside the anchor text would lead to it being somewhat useless.
If you visit the experiment from SEOmoz, you’ll see that the website with the backlinks having the anchor text “Click here”, “See here”, “This entry”, was nowhere to be found in the long run.

What now?
Well, the results of the experiment laid it straight out: build backlinks with relevant, but varying anchor text – and you’ll get to rank well in the long run.

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