SEO Benefits of Forum Signatures
Choosing Forums
For maximum benefit your sig links should be relevant to the forum you're posting in. So, if you are not a member in any forum, find one related forum that interests you and join, usually they are very informative and helpful. You can find forums in your niche by typing "forum +niche" into one of the search engines.

Try to join to busy forums with a lot of text that isn't a link. The bots see that as being "fresh good" content. Do not waste your time posting to forums that does not even generate traffic. The ideal forums will be related forum with high PageRank and many members.

But first, you should check if the forum is SEO friendly, because some forums use "nofollow" attribute, or "no index" meta tag, or use redirect links so that PageRank or reputation is NOT passed.

Backlinks
Increasing PageRank with backlinks Posting on forums with a link in your signature could result in quality backlinks, improving the popularity and overall search engine ranking of your website. When the search engine spiders crawls the forums, your signature links will be detected, and will provide you with many backlinks within a very short period of time.

The problem is that any links from any one site begin to diminish in value the more often they're repeated. Some SEO experts think that search engines only takes one sig link from each forum that was posted to. It would be common sense in light of the fact that forum sigs are totally self-promoting. That's why for SEO purposes is better if you post on several forums, not only one.

If you post on a number of forums, it's likely to have a positive effect on your Google PageRank. Here is an image depicting how backlinks benefit a website's PageRank and search ranking.

Traffic
If you participate in a busy forum, closely related to the subject of your website then a signature link is almost guaranteed to drive traffic to your website. This idea is especially great if you are an active forum user. Chances are the people interested in those threads will be interested in your site following your signature link.

However, because forums are dynamic, older content is driven deeper by newer content; and this is particularly true for highly active forums. You can have 000's of signatures on a forum but most of them will be buried deep in the forum index. So, try to post new comments or replies whenever you can as your previous posts will get buried when other threads are created.

If you don't have enough time to post on all forums, you can hire a forum poster. He/she must be very familiar with the topic too. It is crucial you set the expectation before allowing him/her to use your name and your link in forums.

Proper Links
Do not post something like: "http://www.linksonforums.com".
Instead, if possible, place a descriptive text on your signature and use a keyword relevant anchor text (the text enclosed by the < a href > tags) with your link. Example:

Promote your business using forum signatures to your site

Here "forum signatures" is the anchor text, which should be a relevant and popular term related to the site.

You can use different colors in your forum signature. Usually it is a good idea to highlight the keyword/link with color such as blue or red. So the above example could be written as:

Promote your business using forum signatures to your site

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SEO Benefits of Forum Signatures