Image based links

An image based link is a link that surrounds an image to link to a website, rather than using text based anchor text.

Image links pass Page Rank in exactly the same way as HTML Ahref or JavaScript links (if crawl able) do. Image links do not need to be flagged as manipulative if they are not so. The placement and nature of image based links should be judged in same manner as any other link would be.

The alt and title attribute

In the absence of anchor text, search engines will use the alternative image text (alt image attribute) in its place. The value of the images alt attribute should be treated as being the same as the anchor text for a link when undertaking a manipulative link review.

When attempting to identify manipulative links, it is worth also looking at the title attribute for both the link itself as well as the image. The title attribute is also regularly keyword stuffed by those looking to place manipulative links, often with the used alt text simply repeated across the title attribute within the link and the image.

https://support.google.com/webmasters/answer/114016?hl=en

A common issue

One instance which frequently causes problems is advertising banners, which are often found in the sidebar of blogs. If these links were editorially gained, i.e. given freely by the webmaster or blogger, then they should in theory not have to be nofollowed. However, sometimes, despite being perfectly innocent and natural, they may appear to be manipulative to search engines/

When in doubt nofollow, or remove the link!