An article by Template Monster entitled “You are Being Lied About Reciprocal Links” cites some research by WebSideStory saying:

Exchanging links has been an important part of generating traffic since the concept of Internet marketing was first established, but at least 90% of people looking to trade links don’t understand the real benefits and, therefore, fail to make the most of them.

The vast majority of web site owners think that exchanging links is only helpful because it can boost their rankings in search engines such as Google.com. They are however, useful for this purpose since the number of links back to a site is figured into ranking calculations. But according to WebSideStory’s StatMarket Web site optimization service, search engines account for only little more than 13% of an average web site’s traffic.

I would agree that most website/blog owners don’t understand how to build “good” link programs vs. “a” link program. For example, if you are blogging on the topic of home improvement to help build a platform for your “How to Roof a House” book, adding a link to your blog to your local library, your best friend Bubba’s fishing blog, and vacation pics on Flikr.com won’t really help your cause. Likewise, if you buddy Bubba links to you and calls the link “My Buddy’s Blog”, it won’t help either.

When search engines evaluate links, they weigh in a lot of other factors besides the gross number of links. For starters, they look at the relevancy of your links. If we use the same example, a link to Home Depot’s “Top 10 Roofer Mistakes” articles, Louisiana Pacific’s dealer locator site, or link to the publisher of “How to Roof a House” these links are seen as relevant to your blog.

Another thing to consider is links “to” your blog. This is very important as they create in-bound traffic and tell search engines you are more relevant than blogs with fewer links. Search engines assume that a blog/website with a lot of links is more important than a blog/website with fewer links. Bubba’s link to you won’t hurt you, but then again it won’t really help you that much either. Now if Home Depot links back to you, that will definitely be a homerun in your link building program.

You also need to look at establishing links from websites or blogs that have more traffic and visibility than yourself. Bubba is a nice guy, but unless he is a famous guy or has a cult online following, his low traffic will tell the search engines he’s a virtual “nobody”. Home Depot is a “somebody” and can help you with your rankings. To find out how you can tell, read my Handy Little Browser Plug In for Authors post.

The last piece of the puzzle that most link builders forget to plan for is the name of the link to your blog. If the name of the link to your blog reinforces the keyphrases or words you are trying to be found under in the search engines, this will help your search rankings for those phrases. (Give me an example, Tom!) Okay, let’s take our example of the “How to Roof a House” book blog that we have been using. Ideally, anyone searching for “roof repair”, “how to roof a house”, or “roof house” will find this blog in the organic or free listings on Google. The common words are “roof” and “house” in all three phrases.  So, if the link to your blog had the words “roof” and “house” in them, it would greatly help your link program and search engine ranking. Home Depot would put a link on their website to “Tom Britt’s How to Roof Your House Blog” or “Roof Your House Book”, these words reinforce your own blog’s metadata and it helps you build more traffic. With this in mind, go back to Bubba and tell him to put “Roof Your House Book” on his blog and at least get this working for you.