How to determine the value of a backlink?

What KPIs do you use to determine the value of a backlink?

Example: Blog, intext link in article, 50 outgoing links, PR3, 100 referring domains.

What would you pay for this kind of backlink? Is there a rule of thumb? Like 1$/ 10 referring domains or something? Can you give me some broad numbers I can work with?

DrGonzo2,

Great question here. There are dozens of factors that will determine the value of any given backlink. These can be the page rank of the source page where the link originates, whether or not the link is reciprocal (non-reciprocal links are more valuable), the location on the page of the link, the anchor text, the surrounding text, the depth of the page, and many others.

As far as what you would pay for the link, this could vary based on how valuable it is to you. Someone could place any arbitrary cost on a backlink however if buying it isn't worth the price, then it won't really matter. For instance if someone wanted to charge you 2 dollars per link and they were guaranteed to be from high authority, high PR domains and everything else was equal; and you would only increase your revenue by 300 dollars per year, then it wouldn't be worth buying them. Even if you can find a price you can live with, if you get penalized after 6 months of using them, is it really worth it to buy links in the first place? Although some may not agree, I would be careful purchasing backlinks from those in the business of selling them. If your goals are short term, then perhaps this would work for you. If you have long term goals, I would advise not buying links.

This post gives some background on spotting link value,

http://www.kronikmedia.co.uk/blog/linkbuilding-link-value/2713/

Hope that helps you,

Shawn