First of All, What Is A Link?
A link is a connector between two web pages. It can connect an article on your website to a category or home page, or even another article on the same site. Those are considered internal links since they connect one part of your website to another.
Then there are external links that connect a page of one website to that of another. For example, when I write an article and post it in an article directory, I connect my article page on the directory to a page on my own website via the link.
What Is Link Building?
Link building is the process of going out there and actively building more links - creating more connections - that lead back to pages on your own website. This can be accomplished by writing and submitting articles like the one you are reading right now. Another good link building example is writing guest blog posts that include one or two links back to the writer's website.
Other forms of link building include directory submissions, blog commenting, forum participation, setting up various profile pages, social bookmarking, press release submissions and the likes. Entire courses are being taught and books have been written about the art of building links.
Why Is Link Building Important For SEO?
Why is link building so important and has so many of us devoting hours and hours out of our week on this task? For one, because it creates those connections or highways between pages and sites which of course sends some visitors our way.
By far the most compelling reason to build links though is to rank well in the search engines and thus get tons of free traffic to our sites. Here's why link building is important for SEO (Search Engine Optimization).
The anchor text of a link (that's the words you are using to underline in blue and make a clickable link) is the second most important factor when it comes to ranking a page in the search engines. The first is the title tag. Combined, the title tag and backlinks make up at least 80% of ranking factors. By simply making sure you use the right title and then working on building backlinks with keyword rich anchor text you can get on page one of Google for just about any term. It may take quite a few backlinks if you are targeting a competitive keyword, but you can do will by just doing those two things.
Give it a try. Find a long tail keyword and write a short blog post or article about it. Make sure you include your keyword in the title tag (as early as possible in the tag) and then build a few links to that page with your keyword in the anchor text. For most long tail keywords 2 or 3 good links is all you need to get it to rank on the first page of the search engines.