What schema markup is
Schema markup is a shared vocabulary of tags maintained at schema.org and supported by Google, Microsoft, and other major search engines. It lets a webpage describe its content in machine-readable form: this block is a product, that block is a review, this person is the author, this place has these hours.
On most modern sites schema is implemented as JSON-LD, a small block of structured data added to the page head. It does not change what the page looks like to a human visitor. It changes what the page looks like to a search engine.
Why schema markup matters for SEO
Schema does not directly boost rankings the way a link or quality content does. What it does is make a page eligible for rich results, the visually enhanced listings in the search results: star ratings, FAQ accordions, event dates, recipe ingredients, breadcrumb trails, product prices, and local business knowledge panels.
Rich results take up more visual space on the search page and almost always lift click-through rate, sometimes dramatically. A plain blue link competing against a result with five gold stars and a price will lose a meaningful share of clicks.
The schema types most businesses should implement
Local businesses should always implement LocalBusiness or a more specific subtype, plus PostalAddress and OpeningHoursSpecification. E-commerce sites should implement Product and Offer on every product page with accurate price and availability. Service providers benefit from Service and AggregateRating. Article schema is appropriate for blog posts. FAQPage schema is appropriate for any page with a real question and answer section. BreadcrumbList schema should be on every interior page.
Overusing or misrepresenting schema, for example slapping AggregateRating on a page with no reviews, is a manual action risk. Google has penalized large sites for this. Implement schema honestly or do not implement it.
How to add schema to your site
JSON-LD is the format Google recommends and is by far the easiest to maintain. The script tag goes anywhere on the page but conventionally in the head. After publishing, validate every page in Google's Rich Results Test tool to confirm the schema is parsed without errors and the page is eligible for the rich result type you intended.