Google has enhanced the reporting capabilities in its Webmaster Tools to show full phrases being used in anchor text, instead of just keywords within the anchor text of links to a site, the company said on its Webmaster Central Blog last night.
Webmaster Tools previously had reports showing the top terms were included in the anchor text other sites are using to link to them. So the list would include the terms "Search," "Engine," and "Watch" when it assesed this link: Search Engine Watch.
With the new reports, the entire phrase will be shown on the list, so the previous link would show up in reports as "Search Engine Watch," which is a much more useful bit of information.
The report is available to verified webmasters who have logged into Google's Webmaster Tools, under the "Statistics" tab, in the "Page Analysis" section. The list of top 100 anchor text phrases can be viewed as a table or downloaded as a csv file.
It's useful to see what anchor text is being used to link to your site, as it provides some insight into what people think of your site, or why they are linking. The anchor text also affects Google's ranking algorithm, so since lots of other sites link to our blog with the term "SEW blog" as anchor text, that affects results for a search on [SEW blog], causing this site to show up at the top of those results.