The Importance of Links in SEO
There are essentially two types of links: reciprocal links and contextual or textual links.
What Are Reciprocal Links? |
Reciprocal Links are links back to your site from a site that you've linked to on your site. In a you-scratch-my-back, I-scratch-yours arrangement, webmasters and site administrators create mutually beneficial relationships with other value-rich sites by each agreeing to post a link to the others' sites.
The link you place on your website to another site is called an outbound or outgoing link. The link to your website placed on another's website is called an inbound or incoming link.
A reciprocal link arrangement may include provisions for:
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the page on which a site's link is placed |
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the font, size, and appearance of the link |
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the page to which the link leads |
Most reciprocal links are posted on a website's link directory. A link directory is a single web page or section of web pages on your site where your links are collected and organized in a way intended to appeal to your visitors. Most websites place the bulk of their reciprocal links on such a link directory page or section.
What Are Contextual/Textual Links? |
Contextual/Textual Links are links placed in the body of a website's content that relate directly to the context of content being linked. Contextual links may be:

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definitions of terms |

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footnotes |

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source/reference/bibliographic information |

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expansion of specific aspects of the content, providing extra detail |

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related mixed media - streaming videos, podcasts, feeds |

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advertisements for products and services |
This latter use of contextual links is also being popularly used as a way to further monetize a website. You can sell ad space on your website for sponsored links to products and services that directly relate to the content of your site and the interests of your shared target market. An easy way to get started in this venture is through Google AdSense.
Alternatively, you can pay for relevant, targeted sponsored text links on other sites to generate more traffic to your site. An easy way to get started in this venture is through Google AdWords.
Whether reciprocal or textual, the primary criterion for choosing links is not the page rank of the website in question; in fact, it has nothing to do with search engine rankings. What it does have to do with is whether or not you like the site. If it's a well-designed website that contains good content that you find interesting and therefore think your site visitors will find interesting, link to that site. If not, don't bother.
You don't need to have more links than your competition to come out on top. And you certainly don't need to have as many as you can possibly accumulate. What you need are several choice links that have value to your visitors. Quality links lend your website authority and relevance. Quality links add value to your website.
What is the Relationship Between Links and SEO? |
Search engines - the 'S' and 'E' in 'SEO' - organize the web for easy user reference by indexing the content on the internet and providing it in an easily searchable format.
Links build the internet. Links are the foundation of the web—the interconnections that make it literally a 'web'. When people surf the net, they ride the wave of links. Links are a primary tool that search engines use to index and reference the internet.
To improve your search engine rankings, improve the quality of your links and increase your link popularity.
How Can You Get More Quality Inbound Links |
For starters, make your website a site that's worth linking to. Make a better website and more people and businesses with sites of their own will be interested in linking back to you.
And two leading ways to build a better site, one that has value, one worth linking to are to add/increase your site's —

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relevance - meaningfulness to your visitors based on how well you address their interests, desires, and needs |

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authority - trustworthiness and reliability of the information presented on your site. |
Beyond that, establish meaningful relationships with other sites that have relevance and authority. Also, increase the quality of your links as well as the quantity of quality links on and to your site.
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