One of the main indicators that the site is affected by Google Penguin update is the loss of traffic. At first glimpse on Google Analytics, a huge drop of line is visible prior to that date. It is one of the best indicators that your site was affected by the algorithmic shifts.There are also a lot more indicators that are quite obvious as mentioned below.
A slight drop in backlinks can affect ranking, especially if the loss are the high quality ones. The reason behind backlink loss after the update is that Google discredited previously recognized backlinks. The kind of backlinks that has a low quality, spammy and has a higher irrelevancy factors are labeled as trash links. A good flow of high quality backlinks coming from quality and relevant site is a good factor to achieve higher rankings in Google and other major search engines.
Referring Domains
One of the main reasons for a certain drop on referring domain in the latest Google Panda and Google Penguin updates is the devaluing of Google to some of the low quality domains pointing to our site. Lots of credible sites linking to us are rejected and penalized by Google due to low quality backlinking/webspam. Backlinks and referrals are directly proportional, the more diverse our backlinks, the more referring domains we have. In order to gain referrals, a good and high quality link acquisition is a must.
Referring Anchor Phrases
Anchor text targeting is not organized and has been abused. This can cause a serious problem and could lead to Google Penguin Penalization. Proper keyword density and anchor text distribution is very important to avoid future search engine penalty.
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