Some Research Ideas

As a potential first research topic, I was intrigued by an article about peer-to-peer lending, which argued that it was likely to grow because peer-to-peer companies like Lending Club offer a) lower interest rates than traditional lending institutions and b) easier access to loans for people with shorter credit card histories. Though this isn't strictly about a media company, it is about the use of the medium for new banking platforms. My research question would be: can peer-to-peer lending sites compete with traditional banks? Drilling down: Are the services they offer substitutes for personal bank loans? How sustainable is the economic model given the flux in the economy? In theory, the concept is interesting because it allows people to bypass more restrictive banking requirements to acquire loans, consolidate debt and perhaps improve their lives.

In order to pull this off, I would likely need to find out how the structure of peer-to-peer lending operates, what kind of regulation it faces, if any. On one front, I would need to compare the fluctuation of interest rates in both traditional and peer-to-peer lending institutions, compare average sizes of personal loans, and compare how many are funded and by what criteria. On another front, I would also need to find out how stable the return on investment is for both types of lending institutions and how many defaults there are in both settings. I think this is both supply and demand side data, since the demand-side here is actually the number of defaults for peer-to-peer investors, and since the focus is on loans then the unit of analysis is the product. In terms of peer-to-peer lending institutions, Lending Club for example actually offers some really solid data of its business. For traditional lending institutions I would probably look at data from the Federal Reserve.

As a potential second research topic, I am interested in exploring the search engine optimization market. Given that we live in an information economy and that search engine clicks and visibility depreciate with their rank on Google searches (which is ultimately the biggest portal to the web), it seems like SEO can play an enormous role in helping businesses get “attention” currency. On the other hand, I don’t think SEO is something entirely new. It’s essentially advertising, though on a more technical level (metadata, keyword precision, etc). Also, some question the need for SEO, especially in a world where attention is gained through sharing (on social media and elsewhere). If someone has an inferior product, will SEO matter?

I am interested in finding out a) what challenges this industry faces, including compliance with Google policies, b) whether it has grown and how significantly, c) how concentrated it is and how much competition there is and d) whether its services actually create value for the clients. In terms of data, I think this would be largely an industry / market study, so probably sites like Searchenginewatch.com and SearchEngine Journal, which dedicate sections to SEO industry news, could provide information about the structure of the industry. Some companies, like Industrial Business Marketing provide data about their own performance. But also, Sempo has released reports on the state of the industry which also provide some good figures about their performance. Ultimately I hope this sheds light on a bigger question – if online advertising makes little money for advertisers (except for giants like Google), then how do SEO firms thrive financially?