What does Anchor Text mean?
This is any text which forms part of a link. So in the following link: How to SEO
the anchor text is "How to SEO".
Search engines place some importance on what is in anchor text so you should always look to make the most of it.
One of the most common mistakes, for example, is to use "click here" which means nothing to the search engines and is no indicator of what the destination page is about.
To find out more about using anchor text within links on your own website see Cross Linking
Off site anchor text
There was a time when what was in the anchor text of links from other websites to your website had some importance. However because people started massive link building programmes where every link said My keyword phrase
search engines started to discount this as a factor.
As of late 2012 search engines actually now look for a natural set of links from other websites to yours. In real life people simply don't create links that look like My keyword phrase
. They make links such as check out this website
and I read about it here
You will still find plenty of companies offering to build links the old way. Another case of cowboy companies feeding off buyer ignorance so make sure you are not one of them.
You can actually receive penalties, or be completely banned from some search engines, for creating what they see as "unnatural links".