By Anders Petterson, Founder and Managing Director of ArtTactic.
A few months ago, I organised a workshop in London on ‘How to research your art business idea’. The course was running over 3 evenings and brought together a diverse set of individuals from the gallery world, online marketplaces, collectors and art advisors. What was striking, was the hunger for data and research among this group, and particularly how data could be used in a professional capacity to help these businesses making better and more informed decisions.
Since I set up ArtTactic in 2001, the art market has undergone a seismic shift in terms of its size and geographic reach, but also with regards to how we increasingly view the art market as an industry. In terms of annual sales, TEFAF reported about $64 billion in annual sales in 2015, up from $35 billion in 2005. Although the US art market has dominated the world rankings in the last 15 years, that position is far from secure, as we see the global art market shifting towards the east. In 2011, China was crowned the largest art market in the world, no small feat for a market that was hardly featuring in any world ranking 10 years prior to that.
Wealth generation and accumulation coupled with low interest rate environment and volatile returns among other asset classes – have fueled the interest in art as an asset class, bringing the world of finance closer to the art market. The Art & Finance Report 2016 – a co-production between Deloitte and ArtTactic, reported that 78% of wealth managers believe that art and collectibles should be included in as part of their wealth management offering.
So what does this all mean? From a research and data perspective , this is good news. As the art market is gradually moving from a small niche market towards becoming a global industry – data, information and research are becoming essential tools in supporting the development and growth of both new and existing businesses in the art market. Sotheby’s recent acquisition of the art-index company Mei Moses, is a sign of a market that is becoming more data-driven.
Whilst data and research traditionally were focusing on auction data and prices of art, the new art industry is in need of a broader set of indicators to help them navigate an increasingly complex marketplace. In this short article, I will discuss some of these new data sources and research projects that we and others have generated in recent years.
Historic auction prices can be traced back to the 1760s. In 1961, Gerhard Reitlinger, an art historian, wrote the book “Economics of Taste: the rise and fall of Picture prices (1760-1960), which was one of the first attempts of collecting a large data sets and analyzing auction price data to better understand the nature and dynamics of prices and the art market. Today, auction prices remain one of the most important data sources for analysing and understanding the global art market. However, auction sales represent less than 50% of annual art market sales according to the latest TEFAF Report, which means that there is a significant part of the art market that cannot be monitored through transactions taking place at auctions. These markets would typically include younger contemporary artists, artists that are working in less marketable mediums, such New Media art. But also established artists from countries or regions that is yet to have a developed auction market.
Primary market data:
In the absence of auction data, or even if auction data exists – there is plenty of footprints left behind in the art world that can be aggregated and analyzed in order to gain insight into different aspects of the art market and to better understand the value of art. One very useful source of primary market information is exhibition data. This data includes valuable intelligence about the current status or reputation of an artist, but can also be aggregated to get a broader sense of the curatorial interest in certain topics such as subject matter, medium, gender, etc. Companies, such as ArtFacts.net has been working with exhibition data since 2001, and is producing Artist Rankings based on this qualitative data.
Social media data:
The art world has fallen in love with Instagram, and it starts to have an impact on what people buy. In the recent Hiscox Online Art Trade Report 2016 42% of younger buyers said that social media had a direct influence on what they buy. So no wonder why the art market has been quick in jumping on the social media band wagon. Museums such as Tate have drummed up 1.1 million followers when this article was written, Sotheby’s had 377,000 followers, and artists such as Banksy having 1 million fans on Instagram. With this trend in mind, it’s pretty obvious that data and behavior derived from these sources will start to matter in the future and can provide interesting insight into the influence and evolution of taste.
Since the ‘Wisdom of the Crowd’ was published in 2004, a book written by James Surowieck, an increasing amount of literature have been produced on the value of aggregation of information by groups of people. These days, crowdsourcing for data and forecasts have been widely applied from sports to security and intelligence. In 2013, we started a project with students at Sotheby’s Institute called ArtTactic Forecaster, which is a competition based on forecasting the outcome (or value) of individual artworks coming up at auction. Whilst the competition continues to draw in students who want to practice their art valuation and forecasting skills, it has also become a platform for art experts (auction house specialists, art dealers and art valuers) to both provide forecasts as well as receive valuable information about what other experts believe something is likely to sell for.
Art industry data:
In the last 5 years, we have seen an increasing number of reports and publications produced on varies aspects on the art market. Many of these publications are annual or regular publications which provide interesting data and analysis of the changing nature or the marketplace. Below I have mentioned some of these regular publications
TEFAF Art Market Report: This report was first launched in 2008, and up until 2016 written by Claire McAndrew and has become an annual barometer for global art market trends regarding dealers and auction sales. Claire McAndrew will from 2017 publish a report in partnership with Art Basel.
Deloitte Art & Finance Report: The inaugural report was published in 2011 as a co-production between Deloitte and ArtTactic. The report is now in its 4th edition and has become an annual barometer for trends and developments in the global Art & Finance industry. The report looks at this new industry from the perspective of three main stakeholders: 1) the wealth management community 2) art buyers and collectors and 3) art professionals (galleries, art advisors, auctions)
Art Fair Report: This report is produced by the Art Newspaper and provides an insight into the global art fair landscape. The report looks at the art fair evolution between 2011 -2015, and includes information about geographical distribution and growth, gallery retention rate, as well as specific information about exhibitor floor costs etc.
Hiscox Online Art Trade Report: This report was also first published in 2011, a partnership between Hiscox and ArtTactic. The report provides an annual overview of the growth and changing nature of the online art market. It monitors both the key online art market players, as well as changing behaviour among existing and new online art buyers. In 2016, the report published its first Online Art Platform Ranking, which will be an annual feature in years to come.
Barnebys Online Auction Report: The first report was published in 2016 and takes a closer look at the trends in the online auction market. The report looks at sales value and sales volume across different price segments, as well as the distribution of auction buyers by channel, device and demographics.
Compared to other industries, the art market has a lot of catching up to do when it comes to the depth and breadth of research. But with an increasing call for more transparency, the demand for art market-related data and information are set to increase.
If you are interested in learning more about the art market and art market data, check out ArtTactic recently launched online ‘Research Bootcamp for Art Market Lovers’. Art Entrepreneurship and Innovation´s readers get £30 off with the coupon LAB2016. Available until November 30, 2016.