Try an Experiment
If you have a web site, try this experiment when you have some spare time. Pick a nonsense phrase, like "bed happy meatball" or anything equally silly. Make sure it's something very unlikely to appear on a web page anywhere, and make sure it's a phrase (not a single word). Also, make sure it does not appear on your own site.
Next, get a few friends or co-workers with web sites of their own to post a link to your site using that exact phrase (without the quotation marks) as the anchor text. What's anchor text, you ask? It's simply the word or words that form the clickable part of a link.
Now, wait a while. Make a note to yourself to check your web site's ranking in the results for a search of your chosen nonsense phrase at a major search engine in a month or two. Unless you picked a phrase that actually appears on other sites, you'll find that your site is #1! Moreover, that's in spite of the fact that the chosen phrase does not appear anywhere on your actual web site. Think about that.
An infamous, large-scale example of this same test involved the phrase "miserable failure." Some enterprising bloggers got together a few years ago and decided to link lots of sites to the official biography page for President George W. Bush at the whitehouse.gov site. The goal, of course, was to make that page show up in the #1 position whenever unsuspecting (or in this case, many suspecting) searchers typed in that phrase. It worked. (Side note: at last check, Michael Moore - famous film maker and Bush detractor, was in the #2 position at Google for this same search). Again, keep in mind that the phrase "miserable failure" does not appear anywhere on either man's web site.
Is There a Point?
OK, so why bother with this seemingly asinine experiment (that's actually been dubbed 'Googlebombing')? Ahh, Grasshopper, for the lesson it imparts. Which is? Well, it points to the power of anchor text in determining search engine ranking. And it has definite relevance to your activities as a webmaster.
Many of your fellow site owners - including a lot of them who run sites in direct competition with yours - have never heard of anchor text. Some of you reading this may be unfamiliar with it. But, as should be clear now, anchor text plays a major role in search engine ranking positions.
In basic terms, it works like this...
Search engines rely on links to help them ascertain both the theme of a given web site and its popularity. Knowing that, consider two scenarios. In the first, your site has built up a lot of links pointing to it, and each one has your domain name as the clickable part of the link (anchor text). Let's say your domain name is your company's name, JoeSmithBakery.com - and you sell baking supplies. OK, great - now your site will show up in the #1 position at the search engines whenever anyone searches for your domain name! Hmm. Think that one through. If they know your domain name, why would they need a search engine to find it?
In the second scenario, you have lots of links pointing to your bakery site, but instead of the domain name as the anchor text, you wisely chose a phrase that lots of people search for, like 'baking supplies.'
Easy question: which would you prefer - being #1 at Google when people search for your domain name or being #1 when people search for bakery supplies? This is why the anchor text you choose for the links you build is so important.
A Plan of Action
Now, here's a simple plan of action to improve your site's link situation and search engine ranking going forward from this day...
Step 1 - Research Keywords
A great service is provided by the folks at wordtracker.com. They catalog search activity at the major engines, and then make available those numbers to the general public. You simply type in a word or phrase related to your site's theme, and wordtracker shows you the number of times that entry is being searched at the major search engines. Cool, huh? The service will also give you a list of related terms, so you can look for other important search words to target.
Step 2 - Pick a Few and Get Some Links
Compile a list of several search terms that are most closely related to your site's theme and that get searched for often. It's up to you, of course, but you should pick those phrases that get a few hundred to several thousand searches. These will be the terms you use in the anchor text of the inbound links you build from now on. Doing so will really increase your site's search engine traffic - once all your new links begin to boost your rankings.
Nothing Else Changes
Now, just carry on with your usual link building activities: reciprocal links, one-way links from directories and article distributions, etc. The only change is to make sure you choose a phrase from your list to use as the clickable part of the link you ask for (the anchor text). If you rotate your choices, your site will move up in the rankings for each phrase. The only downside is that you'll be getting fewer links per phrase, so it may take longer for any single phrase to rank high.
Keep in mind that the phrases you pick will be popular, unlike those in the examples that began this article. To score high rankings, you'll need to be diligent and get lots of links. Never stop! Over time, this strategy will really help your site's traffic, but it does take time. As the famous poet, Henry Wadsworth Longfellow, famously wrote: "All good things come to those who wait."