Here are some simple tips for effective image optimization including a tip that means you will never fall foul of DMCA issues or hate from other webmasters :)
1. Use the keyword(s) in the file name. Keywords are, as hopefully you will be aware, essential to help a page rank on the search engines. You need to incorporate the keyword into your URL, <h1/2/3> tags , content and, naturally, your images as well. Remember to use keyword-rich image names to help with your on-page SEO efforts, for example:
This image was originally called “iStock_0004221245XSmall.jpg” - no keyword information there, so I called it “image-optimization.jpg”. Your images should not simply be decorative but they should in some way, be connected to the content of the page. If possible, it also a good idea to get images that complement the color scheme of the site, although this is a minor concern.
Google actually suggests that you place your images in a single folder on your web site. For example, you could use , yourdomain.com/images as opposed to keeping them in random folders scattered across the site. Its also recommended that stick to common file types for images such as jpg, bmp, png or gif.
2. Optimise Your Alt Tags: The alt text tag is a great way to let the search engine robots know what your image is about. Remember, the search engines cannot infer the content of image without some help (yet!) so you really need to put your keywords into this tag. You can also use image captions, but these sometimes don't fit in with the design of your web page, so make sure that, as a minimum, you have the keywords in the Alt tag. If you are using an image in a hyperlink to another page then its a good idea to treat the Alt tags like anchor text and use the keyword(s) of the page being linked to.
3. Use Appropriate Images This tip wont necessarily help your rankings directly but it will make your posts look better and help bring out the content. This should, in turn, lower your bounce rate and increase the time on page which will, or course, indirectly help your rankings. Great images really add another dimension to your content and can encourage people to share the page which will, again, help with your off-page SEO (these shares will result in backlinks). No one likes to read a huge block of text, so break up your content with images (and video) for better results. Also, if you post to Web 2.0's a lot (like Blogger here) then include images to let moderators know that your sites are not being built by robots. This will stop them getting deleted.
4.Use Appropriate Anchor Text Links to your images should also contain the keyword in their anchor text. Post Penguin, its a good idea to mix up your anchor text (I use about 40% keyword, 60% other anchors), so you should still descriptive anchor text at least some of the time. For example, if you have a link to an image of a flower, use the anchor text 'yellowflower' instead of generic terms like “image” or “photo” or even the file name. Linking to an image with keywords is helpful to search engines as well as people visiting your site.
5. Don’t Keyword Stuff Keyword stuffing is the process of using multiple keywords or long tail variations of keywords in an attempt to try and fool the search engines. Its black hat and it doesn't work, so avoid doing it! Back in the day, black hat SEO guys used to create 'gateway' pages which were either just full of keyword text and no content or were duplicate content with just the keyword replaces ie 'Edinburgh plumber' changed for 'Glasgow plumber'. The search engines all penalize this kind of approach now and its very easy to detect. The same applies for image tags, so keep your alt text, captions and file names short and descriptive, and avoid using a long list of keywords. As with most SEO these days you need to keep your audience in mind and optimize for your reader first search engines second.
6. Share Your Images There are loads of great image sharing websites such as Pinterest, Instagram and Flickr that are free and get a boat load of traffic. If you own the images (not stock photographs then re-post them on these services and they will be shared, leading to backlinks and traffic to your site. Google also spiders these sites and images can appear in the Google Image search as well, which has the potential to bring even more traffic.
Heres where I find a lot of my images.
Flickr – A huge resource that enables you to search for creative commons images. Millions of free images that you can use without any copyright issues.
stock.xchng – Been around a long time and boasts a ton of royalty-free stock images.
iStockPhoto – Commercial service but image prices are cheap.
I also use Google Images but its worth making sure that you search for images with the proper licensing. (They allow you to search Creative Commons and other public licenses.)
Be very careful when using images, as if you don’t have the permission to reuse it, companies and sites can take legal action against you. The general rule of thumb is this: if the image isn't Creative Common licensed or you didn't buy or create it, don’t post it.