Just to cover the ground, lets go over what link building is quickly. Link building is the process of building backlinks to your site. More backlinks (link form other sites to your site) a site has, higher it ranks on the search engines. Link building therefore is a mission of all money making webmasters.
Link building methods have changed form time to time and a specific method that worked yesterday may not work today anymore. This is due to changes in the industry over time and in some cases extreme abuse. If a specific link building method has been abused too much, then that method will not work anymore.
It is therefore very important to know which link building method works today so that you can spend your time in a most productive way.
There are many link building methods out there today that work with some working better than others. Below are some of the today's popular links building methods that work to some extent:
If you are reading this article, then you know that you can publish your own article in article directories. Not only do you gain backlinks to your site from your published articles (see bottom of this article), you will get some traffic as a bonus. Think of you reading this article. There might be many reading your published articles as well.
Article submission is a great way of building backlinks as it provides you with 100% relevant contextual backlinks that Google loves.
Directory submission used to work lot better before but it is still a popular link building method that still works if done properly. How many directories are out there as of this date is anyone's guess but one thing is certain: that most of the directories aren't worth submitting to.
Google considers a Yahoo Directory link as a quality backlink so if you can afford and justify the cost, it is worth submitting to Yahoo Directory. Yahoo charges $300 for a yearly submission and there is no guarantee that your site will be approved!
DMOZ is another directory that is worth submitting to and can come to great benefit in your SEO campaign. It may take months to get the approval form DMOZ and the chance of getting approved is pretty slim. Lot of small directories use DMOZ directory categories so getting listed with DMOZ would mean getting bonus listing on many other web directories.
Another good directory to submit to would be BOTW directory that cost $99 for a yearly submission and $299 for a permanent listing.
Other than the above ones, you should look for quality directories where you can submit your site. You can judge the quality of the directories by analyzing the number of sites listed, number of backlinks the directory has, PR, age of the directory, etc.
Social bookmarking worked like charm only a few months ago. If bookmarked on authority and quality bookmarking site like Digg, Mixx, Propeller, etc, then you can still make good use of social bookmarking. Other than backlinks, social bookmarking also offers you some bonus traffic depending on where you submit to. If you can manage to put together or collect a good bookmarking site list, then social bookmarking can still be a useful link building method.
This is a link building method where lots of spamming have already been done so to make the best of it, you need to work a little harder here. It is best to find quality blogs related to your own category and make on-topic relevant comments. Not only do your comments add value to the blogpost, you now have a greater chance of getting your comment approved and your comments have greater chance of staying on those blogposts.
Submitting to press release sites can get you some backlinks as well. It is however hard to put together a list of good press release sites that's worth submitting to. If a good list can be managed, then this method can offer some quality relevant backlinks as well.
Social Media and Web 2.0 Pages
There are a lot of quality social media and Web 2.0 sites where you can publish your articles for backlinks. You should write articles that are relevant to your site and publish them on these social media and Web 2.0 sites with your keywords hyperlinked to your own site. Some of the authority sites are Squidoo, Hubpages, Blogger, Wordpress.com, etc.
Social media and Web 2.0 links are very popular these days as they work great. They offer quality relevant contextual backlinks that Google and other major search engines love. There are lots of other link building methods out there but if you can utilize the above ones to their fullest potential, there is no need for any other methods.