How can you tell if Google has already assessed a penalty against your site for spammy links?
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Is there any way to tell for sure if there is a penalty? My client has a ton of low quality back links, and I think they are in danger of a Penguin penalty. Any way to know? The links are there for a business reason.... their clients mention them in the footer, with a backlink. It is not a link scheme. but folks are generally not clicking on a footer link, and so there is a pro/con of leaving it as it.
Any way, to diagnose whether a Penguin penalty has already hit?
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You can check for a manual penalty by going to Webmaster Tools and then clicking on Search Traffic --> Manual Actions.
If there's no manual action though then there is no exact way to determine whether the Penguin algorithm is affecting the site.
Sometimes, you can see signs if you notice a ranking drop or a drop in organic traffic on the date of a Penguin refresh. But, if the site wasn't getting lots of traffic to start with then it's not always that obvious.
As to whether or not the footer links are causing a problem that's a tough call. If they're keyword anchored then they definitely need to be changed, removed or nofollowed. If they are url anchored then it's hard to say. If you want to look at it in a black and white way, ask yourself whether you would be comfortable showing the link profile to Matt Cutts. If you are hoping that he (or the webspam team) never sees the site then it really would be best to nofollow those links. Really, if they are there for the purpose of referral traffic and not to pass PageRank then nofollowing is best.
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I would map the analytics data to the major algorithm changes and look for spikes, check out http://panguintool.barracuda-digital.co.uk/ If it's a manual penalty you will see it in webmaster tools, but for algorithmic you kind of have to guess if you are hit or what not and to what degree you were penalized.
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