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Contextual Link Building 'Whys in addition to Hows'.
Contextual Link Building is a wonderful way to build way up a links program along with building traffic. Contextual links mean that the customers has to read the hyperlink before clicking through. What does this imply?
It means Contextual links draws site visitors, interested in what your link must say. Contextual linking also put value into what them are reading - they may be real traffic pullers.
Contextual links also help the various search engines analyze your page as a result of anchor text. Anchor text is simply the words between the 'anchor tags' (which resemble). This is what the search results sees and registers. You should embed your keywords into the anchor text to further help the major search engines figure out what you are on about - so make them relevant! Short and to the purpose.
So where should I try Contextual Link Building?
Articles
Quality articles with in-context inbound links are great. The visitor is already reading and discovering the specific topic. Not only will your links mean something and add value towards the reader's experience, but you gain targeted visitors actively seeking out more details.
Adverts
Although the word 'contextual' just as "in-context" is certainly stretched in the few characters you have to write a text-based advertisement, if you use a brilliant choice of keywords and provide enough contextual information, you should gain highly-targeted leads - only the best thing for your advertising RETURN ON YOUR INVESTMENT!
Your Own Website
Using contextual links inside your own website is a wonderful way for keeping your own visitor sticking around on your website. Like with articles, you retain highly-targeted visitors whose user experience is getting ever better. The longer they dedicate to your website, the more exposed in your marketing efforts they become and the more they trust an individual.
Blog Comments
Where a blogger leaves a question for folks to comment on, try working in contextual links into your answer. Provided the answers include value, you can also obtain highly targeted leads. The nature of (productive) blogs is you get a loyal following which will often come and check up on all the latest revisions, including comments and next leave. Your link will very likely get 'crawled' by blog followers that are interested in that specific post.
Forum Signatures
Where forums allow signatures, weaving in contextual links will take you traffic as your own credibility on the community forums grow. The interesting thing about forums is they often don't have that higher PageRank - nevertheless they do excel in content-generation and traffic as a result of a regularly contributing group of members.
As a result, search engine robots practically continue to exist forums and forums themselves do quite well as search engines, particularly for 'long-tail keywords'. This leads to all the more highly targeted leads for the contextual links.