Anchor text is the clickable text in a hyperlink. SEO best practices dictate that anchor text be relevant to the page you’re linking to, rather than generic text. The blue, underlined anchor text is the most common as it is the web standard, although it is possible to change the color and underline through html code. The keywords in anchor text are one of the many signals search engines use to determine the topic of a web page.
The anchor text is also known as the link label or link title. The words contained in the anchor text help determine the ranking that the page will receive by search engines such as Google or Yahoo and Bing. Links without anchor text commonly happen on the web and are called naked URLs, or URL anchor texts. Different browsers will display anchor text differently, and proper use of anchor text can help the page linked to rank for those keywords in search engines.
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When websites aggressively build exact match anchor text links, a Google spam filter is triggered. It is unnatural for web pages that link to your website to all have exact match anchor text. A bit of anchor text variation is natural, just like how a great portion of the internet’s links are naked URLs.
As a result of being a search engine signal for relevancy, it is possible to over-optimize your links’ anchor text.
Targeted Anchor Text
Linkbuilders, or SEOs specialized in building links to a website, often control the anchor text from the links they build from other websites. These anchor texts are targeted – the keywords in the anchor text will match the targeted keyword of the page an SEO is trying to rank on.
Backlink Anchor Text
A backlink is a link from another website. The backlink anchor text is the anchor text used by other websites linking to your website. The anchor text of these backlinks help search engines determine the most relevant keywords a web page should rank for.
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If website A links to website B with an anchor text backlink and website B does not link back to website A, then you have a one-way anchor text backlink. One-way anchor text backlinks are sought out by SEOs because PageRank juice flows from one domain to another. It is believed that the more one-way anchor text backlinks a web page has from websites with high PageRank, the better they will rank on search engines.