Title attributes in link tags improve user experience and make sites more accessible to screen readers and other browsers. It seems that search engines may consider the title attribute in determining the ranking of the site being linked to in the link tag, but to a very small degree. As with most SEO decisions, improving usability and user experience will likely improve rankings in the long term since search engines continue to hone their algorithms to reflect how usable sites are (among other things).
Aside from being a usability best practice, it's worth noting that Target was sued for not making their site accessible, and that even if web publishers are not required to comply with the Americans with Disabilities Act, it's a good idea that serves both visitors with disabilities and non-visual browsing situations in the future (e.g., various mobile applications).
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