Anchor text refers to the visible, clickable words used in a hyperlink that link one web page to another within the same website or to an external website. It plays a significant role in search engine optimization (SEO) as it provides context to search engines about the content of the destination page, thus influencing the page’s ranking for specific keywords. Effective anchor text should be relevant, concise, and not overly keyword-rich to avoid being seen as spammy by search engines. It is a balancing act between being descriptive and natural within the content. When used strategically, anchor text can help improve a website’s SEO by making it more navigable, helping search engines understand the content better, and potentially increasing the site’s rank for targeted keywords. However, misuse of anchor text, such as using the same exact text repeatedly or engaging in manipulative practices, can lead to penalties from search engines. Therefore, it’s crucial to use anchor text wisely as part of a broader SEO strategy.