The Google Penguin update is one of the Google algorithms that most people fear because it has demoted many websites over the years. First released in April 2012 the Penguin was released to catch people who were employing bad quality SEO link techniques.
Linking techniques such as directory links, link farms and paid links to an extent, were all types of linking techniques which the Penguin was designed to counter. In reality Google thought that people were obtaining links too easily and you should have to work harder to obtain links rather than the easier methods above. Nowadays it is about the quality of a link rather than the quantity.
I mention in the Panda article that a lot of people get mixed up with Panda and Penguin. Penguin is all about black hat linking techniques whereas the Panda picks you up on low quality content. Unfortunately you can get picked up for both penalties and if this is the case you have a job on your hand to win back Google’s trust.
If you have been picked up by the Penguin update then you will likely see a drop in traffic and rankings, just like the Panda update the only way to know for sure if you have been picked up is by logging onto Webmaster Tools. Messages such as “links to your site violate Google’s quality guidelines” will be shown in the messages box. If you receive these messages then you will need to take steps to remove the links or the penalty will continue to stay active. As a last resort you can use the Google Disavow tool, by using this tool you are telling Google to ignore the bad quality links, but this technique isn’t guaranteed to work.
When you are link building think, is this link obtained without doing any work? Are you paying for the link? Is the link poor quality? If any of these are true then you can potentially be hit by the Penguin update by doing these excessively. Links nowadays are all about quality rather than quality so take your time to create high quality links to avoid being hit by the Google Penguin.