Understanding it
The idea goes back to PageRank, Google’s founding algorithm described in 1998: a page that receives links from important pages becomes important itself. The principle has been refined since, but it has not gone away.
Not all links are equal. A good backlink comes from a site in the same field, sits in a paragraph about the topic, uses anchor text that describes the target page and sends real visitors. A link buried on a page with 500 outbound links passes on very little.
A link can also be qualified: nofollow, sponsored for a paid link, ugc for user-generated content such as a comment. These attributes tell Google not to count it as an editorial recommendation.
A concrete example
Illustrative example: one link worth 50
A hiking gear maker is torn between 50 links in general directories and a single article in a specialist trekking publication, which reviews its stove and links to the product page.
The article ticks every box: same field, precise context, qualified readers. It brings direct sales and a clear authority signal. The directories have nothing to do with the topic and would probably not be counted.
The common mistake
Buying links in bulk
Google classes links bought to manipulate rankings as spam, and its systems neutralize most of them. The money is lost, the risk remains. Aim for a few editorial, on-topic links, and mark the paid ones as sponsored.