In one sentence: Anchor text is the visible, clickable wording of a link, and it works as a short label telling readers and search engines what they will find on the page at the other end.
Every link on a web page has two halves. There is the address the browser goes to, which most people never see, and there is the wording a person actually reads and clicks. That wording is the anchor text.
Say a plumbing company writes a sentence on its home page: "We also handle water heater replacement in Winter Park." If the underlined, clickable part of that sentence is water heater replacement in Winter Park, that phrase is the anchor text. If the sentence instead ends with "learn more" and only those two words are clickable, then "learn more" is the anchor text. Both links land on exactly the same page. Only one of them says anything about it.
Anchor text turns up in three places: links inside your own site, links from other sites pointing at you, and the links in your navigation and buttons. You write the first kind. Somebody else writes the second. When an image is the link there is no wording to read, so its alt text does the labeling job instead.
Search engines read link wording as a description of the destination written by somebody other than the destination. That outside opinion carries weight, which is exactly why it pays to be plain rather than clever.
Picture a service business with a page about emergency drain clearing. Twelve pages across the site link to it, and every one of those links reads "click here" or "read more." Nothing on the whole site ever puts the words emergency drain clearing next to a link to that page. It can still rank. Its own site simply never vouched for what it is about.
The opposite mistake is louder and worse. When forty links across a site all use the identical phrase "emergency drain clearing Orlando," the pattern reads as engineered rather than written, and it produces stiff sentences no customer enjoys. Write links the way you would say them out loud, vary the wording, and let plenty of links be a company name or a flat phrase like "our pricing." Keeping link wording sane across a growing site is ordinary SEO housekeeping, not a trick.
One practical note that has nothing to do with rankings: people using screen readers often pull up a list of every link on a page with the surrounding sentences stripped away. Nine links that all read "click here" tell them nothing. Descriptive wording is the same fix for both audiences.
Three labels doing three different jobs, and they get traded for each other all the time. Anchor text is the wording of a link. Alt text describes an image for someone who cannot see it. A title tag is the name of the page itself, written by you, and it is what usually shows up as the headline in search results.
Anchor text also comes up in any conversation about backlinks, because the words another site chooses when it links to you become part of how your page is understood. You do not control those words. Any offer to control them at scale is worth a hard look, since the usual method is paying strangers to publish sentences nobody wanted to write.
It is not a penalty. It is a missed opportunity, plus a real accessibility problem. The link still works and the page it points to can still rank. You have just used the one spot where you get to say what the page is about to say nothing at all.
No. A page needs a few clear, descriptive links, not the same phrase repeated everywhere. Mixing the exact phrase with looser wording and the occasional plain see our pricing reads like a real site, because that is what real sites look like.
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