The How: There are some obvious ways to build links with images. You can create really awesome images and make it easy for people to use them on their site and link back to your site with an image credit link.
When creating an image do not just call it dog. Give it a descriptive name and use dashes rather than spaces.
So much better than dog.jpg would be german-shepherd-puppy.jpg
With some of the image sharing sites you can also Geo Tag local business location.
There are also some very easy, submission-style link building tactics that can be done with images. There are loads of directories out there and many allow you to include links back to your site when adding an image. You can also often comment on other images on the site and link back to your own images, profile, or straight to your website.
Alt text for images on your webpage
Text that makes up a link is referred to as anchor text and it can be a powerful tool for search engine optimization. The text in the link tells the search engine what that page is about, and it is so powerful that pages can rank well for terms found only in links to the page and not on the page itself. (Type “miserable failure” into a Google search for an example.)
Customized text links are highly prized for their ability to improve rankings for specific search terms and it makes sense to use them on your internal pages, since those pages “count” when the engines look at links and relevance.
Image links are followed and counted as well, and the text in the alt attribute for the image serves the same function as anchor text.
General theory holds that alt text isn’t as “powerful” as link text, and for good reason. Webmasters who try to “game the system” stuff zillions of phrases into their image alts in an attempt to rank better for those terms. Because it isn’t an element that is likely to be seen by users (unless they hover over an image), it can be more easily abused. In general, search engines prefer to give more weight to elements that users can see.
While it’s difficult to prove that alt text on image links is “less important” than text links, it does seem to make sense that text links have a little more “weight” than image links. Alt text in images if it compliments the rest of the page is still quite powerful.
1.) Use specific keywords, not numbers. Many website owners use numbers on the image name instead of words. It is highly recommended to use descriptive words because it will help your page ranking.
Eg. 000001.jpg or describe_the_image.jpg
(In case you use several keywords, separate it with underscore not spaces.)
2.) The anchor text is powerful if the image is being linked to a site. The words you should use in the anchor text are the ones you are targeting for SEO. It will help the search engine know how the image and website are relevant with each other. Use descriptive phrases and not just a group of tags you are targeting. Be careful because it shouldn’t look like a spammy description.
3.) Use Alt Tags. Although the filename is important, alt tags will serve as additional support to SEO your image. Alt tags and image name could be similar but it has different functions for SEO.
It is advisable to use big images since it is what most people are looking for. They don’t want to look for small images that seem to be pixilated if resized bigger. If you have a good image with a good alt tags, it will mostly likely rank higher in search results.