Anchor text is a term for the words in a sentence on a website that are linked to another place on that webpage or to a completely different page or site. Usually the text is the standard blue color and often is it underlined to show it is a link.
Usually, the anchor words specifically describe what you will find when you click the link. Or, they might simply say, read about it here, although such a "call to action" type of instruction is less favored now by Google.
While the term can apply to a lot of different uses, one particular use that I recommend is for creating internal links within the context of your niche specific pages to take the reader to a related blog post. Recently I mentioned internal links as a Google desired practice in a post on SEO tips for 2017.
See what I did there with that last sentence?
That underlined portion of the sentence above is an internal link, or anchor text. It tells you exactly what you will find if you click on the text, and the format tells you that that part of the sentence is a link.
More and more these days we are seeing anchor text without the underline. This is becoming more common because people are assuming that blue text in an otherwise black text paragraph is a link, and the absence of the underline is less intrusive to the reader's brain.
Although you don't want to go overboard in using internal links such as these, 2 or 3 internal links on a page of 1000 words or so, and especially in the body of a blog post, may gain points with Google's current algorithm.
Technically, blog titles presented in their entirety at the end of a blog post or page would not be considered anchor text, but would be an internal link. Confusing as that is, it's not a bad idea to do some of that occasionally as well.
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