I've had over a decade working in online advertising, including a few months in a failed start up that had a business model that required a flood of advertising dollars to succeed (actually, a moderate flow of dollars followed by an IPO in the pre-Internet bust years would have been been perfectly acceptable to the owners), and my most recent experiences developing online content and marketing web sites,my opinion is that there are two benefits to the site that is the target of the link: a small amount of traffic from the the site hosting the link, and a small boost in the influence the site has within the algorithms that run search engines, especially the major engines like Google and Bing.
Although the boost to the search engine algorithms is small, the cumulative effect of all incoming links can be quite significant. If inbound links are combined with other efforts, such as creating a web site with compelling content and incorporating a number of other often subtle efforts both on a web site and outside of a web site (for example, having a related network of blogs or other social media, and perhaps marketing the site outside of the Internet), then that site may become a first page or even a number one result for relevant searches on major search engines.
As many of you know, I've run the site AirSafe.com, for almost 14 years. I've done many things to make that site a useful resource for airline safety information, and the site and my related online efforts often bubble up to the top of relevant search results (see what happens if you search for 'airline safety'). It has literally hundreds of links pointing to it from around the web, and it gets traffic from a variety of sources, included articles in traditional printed publications both large and small (usually very, very small).
The site was up for several years before I even knew what the word SEO meant. While my design and development process happened to have many elements currently associated with optimizing a web site for search engines (keyword use, linking to relevant content, etc,), my objective for the site was to make it useful for its audience. To do that I was constantly improving the content, looking to see what the competition was doing, and taking advantage of online technology developments.
In the last few years, some of the changes to the site were subtle, like updating HTML tags and changing the naming structure of URLs to be more search engine friendly, but most have been outside of the site. Among the major changes was creating separate online content such as podcasts, opt-in mailing lists, online videos, blogs, and other social media resources like Twitter, Facebook, and RSS feeds to enhance traffic to the main site. While some of those resources had the option of creating relevant direct links, most of them indirectly increased awareness of the main site, which in turn may have caused others to place links to the site form other web sites, from online news articles, and other locations.
The AirSafe.com site has many natural advantages that have come with time, the development of closely related online content, and audience familiarity. Newer sites that don't have these advantages can make up for it in part by creating a large number of inbound links from relevant locations. Some site owners literally place a lot of value in these links, given the very active market for text link online advertising. While these kinds of links may turn out to be useful, the benefit would be much greater if the site owners combine those inbound links with useful and compelling content, a site design that makes the site more attractive to search engines, and other efforts to expand the audience for what the site has to offer.
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