Businesses are expected to spend $77.6 billion in 2023 on search engine optimization (SEO) and SEO-related products and services for one important reason: It’s how you reach customers.
Using SEO to try to rank on the first page of a search engine is so important because 75% of internet users never scroll past the first page of search results, according to software developer HubSpot.
You could have the best products in the world, but if you aren’t easily visible on search engines, potential customers are not likely to find you.
One company that boasts comprehensive SEO, content marketing, market research, advertising, and social media services is exhibiting signs of increased user adoption and just hit our radar: Semrush (SEMR).
With SEMR shares down 44% in 2022, is it time for a look?
Here’s what we’re watching:
1. SEMR User Happiness Is High and Stable
Semrush’s Positive Sentiment score of 89% is impressive, inching even higher on a year-over-year (YoY) and quarter-over-quarter (QoQ) basis.
This high level of happiness suggests high user retention. And it is also a forward-looking indicator of future growth.
After all, clients will quickly leave if services fail to produce results. In the LikeFolio universe, this often surfaces in the analysis of mentions from consumers switching to a new service provider.
Qualitative analysis confirms a growing number of consumers are talking about switching to Semrush from Ahrefs, a competitor that touts itself as “everything you need to rank higher and get more traffic.”
We’re monitoring these mentions to confirm continued market share capture.
2. Consumer Buzz Is Building
Semrush mentions in Q2 2022 are pacing for multi-year highs: Overall mentions are currently pacing +11% QoQ and +22% YoY.
And this is translating to user base expansion.
In its most recent earnings report, SEMR said its paid subscribers rose approximately 19% YoY to more than 87,000.
3. Data Suggests Accelerated User Growth in Q2 2022
Purchase Intent mentions (reflective of people signing up for Semrush services) are trending +37% QoQ and +110% YoY in the current quarter, a new all-time high.
While we’re only two-thirds of the way through Q2 2022, the current pace is strong.
Bottom Line: As more businesses move online and keyword traffic increases, user demand for search engine optimization services is rising.
Semrush appears well-positioned for future growth, but does plan to expand spending in 2022. We’re officially neutral, but we’ll watch this name closely as it wraps up its second quarter.
Head of Research, LikeFolio