• Provide a direct link for visitors to follow based on anchor text enriched with keywords
• Serve as a 'vote' or an increase in popularity that all major search engines determine when showing search engine result pages, or SERPs. 

Compare this to other forms of advertising and you will typically only receive one of these factors.  For instance lets use PPC, or Pay per click engines.  When you create a link with a PPC engine, they will display your text title with a brief description and usually link the title with a very long encrypted type link that is used for internal use, and through server side functions, it will determine where to send the user.  No doubt the action will direct the user to the correct location, however, when a search engine comes in to play, these type of links are not indexed into their database since spiders are based on client side and not server side. 

Understanding this makes you realize that your PPC links only serve as a way to direct people to your website, which is good, but it does not help your "free" search engine listings.  Text link advertising provides the traffic without the server side redirection and also serves as a very valuable popularity vote that a search engine will use when determining where your listing appears when someone searches for terms/phrases related to your website.  Lets be honest, free listings in search engines are a little more appetizing than paid listings. 

Another positive with text link advertising compared to other forms is how you pay for them.  Lets compare text link advertising with all other forms of advertising.  Text link advertising is paid for by terms.  The typical term is for 1 month or 30 days, 3 months or 90 days, and so on.  No matter how many clicks you receive during this term, your price will still remain the same.  Compare this to any other form and if you receive10 clicks, you will only pay for 10 clicks, depending on how much you agreed to pay per click.  If you receive a million clicks, you better hope you make some serious conversions because it is going to cost a ton of money.

In some aspects, paying for performance can be a great deal.  The problems are that people are abusing these systems and causing mass fraud that comes out of the advertisers pockets.  Competitors are running automated scripts that click their competitions links depleting the budgets of the other companies.  Then you have affiliates of the actual search engines that sign up to display the search engine results on their websites and when someone clicks the link, they receive a percentage of the payment.  This results in these affiliates running automated scripts to click thousands of links a day making easy money for themselves.  Or even the company providing the advertising model will charge you for impressions and force thousands of unwanted pop-ups on people's computers just to satisfy a number instead of a return on your investment.

The traffic being sent with these forms are known as dead traffic.  There is no one alive on the other end resulting in no conversion for the advertiser.  Text link advertising is live traffic because there is no reason for an automated script to click your link since there is no result in doing so.  Only a live person will click your link to read what the information is on the other side and this is what any company paying money for advertising wants.

In conclusion, text link advertising is a double sided pass to increasing your online business.  It sends live traffic and not dead traffic.  It is a set price and does not fluctuate based on traffic or anything else.  Text link advertising is based on the most basic form of what the internet was created on and will always be around.