Alternative text, or Alt text, is an HTML attribute that lays out what text will be displayed when a non-textual element, like a picture, gets displayed when the element itself cannot be. Alt text is also what special accessibility software reads aloud, which allows web designers to enrich the online experience of any users who may have disabilities.
Most importantly, alt text also helps search engines determine websites' relevancy, allowing it to index content much faster, which is why alt text is a vital part of Search Engine Optimization (SEO).
Of course, you can't simply use a keyword or search term as alt text if you want it to help your site's search engine ranking. You need to put a little bit more effort into it.
Apart from being keyword dense, good alt text should be three other things: succinct, meaningful, and repetitive.
The longer the alt text is, the harder it'll be for search engines to read it, which is why it needs to be succinct. Between five and 15 words is a good rule of thumb.
It needs to be useful in the sense that it should help the readers -- not you. The point of alternative text is to define the image or other non-text element. Be sure to do that instead of using it to note the file size, file name, and so on.
If the image or other non-text element contains words, the alternative text should include those words, too. That way people can still read it, even if the image doesn't load (or if the user is disabled or visually impaired).