A Few Thoughts on Data-Driven Art Dealing

A great deal can be learned about the art dealing world from the presentation of statistical data. There's nothing extraordinarily useful that can be learned from the currently available data itself (I'll get back to that), mind you, but the presentation of that data is truly quite revealing indeed.

Consider the video below in which Clare McAndrew, perhaps the best-recognized economist presenting data on the art market today, shares the findings from her 2013 TEFAF Art Market Report (and other sources, I believe) with art world insiders at the Talking Galleries symposium held last fall in Barcelona. It's a long video, so if you're short on time you might want to skip forward to the 58:00 minute mark where the Q&A begins (although I do recommend watching the entire thing for insights into how the global art market is being discussed, what we think we understand about that, and what we clearly don't):



Earlier in the video, McAndrew discusses the challenges of getting art sellers to share their own sales results or even complete an anonymous survey. In that context, the Q&A reveals for me a striking paradox: the same industry that seemingly goes out of its way to obscure its sales and expenditures data has unrealistically high expectations for what the data that can be collected is supposed to communicate and verify.

Mind you, the one audience member who questioned the methodology of the report has a valid point. Even if it presents the very best data anyone can realistically gather at this time, the way McAndrew's report is discussed in the press suggests it needs to be presented with far stronger caveats. The industry as a whole doesn't yet seem savvy enough to know how to make use of what McAndrew clearly works very hard to assemble. What I note below about dealers interpreting the data goes doubly for journalists, imo.

Then again, I do feel McAndrew's is the very best data available today, and I believe it's up to the reader of her data to learn how best to use it. Oversimplified conclusions are not demanded by the limited nature of the data, nor are knee-jerk business decisions based on those conclusions.

For example, it's irrational to decide that just because the art market in China has soared over the past decade that it's a reasonable use of your gallery's resources to participate in an art fair in Hong Kong next year with an eye on breaking into that market. A decision like that should also consider (before you apply to that fair) what kind of art has been selling in Hong Kong? Is that the kind of art you sell or can bring to Hong Kong? How much of a commitment to servicing new clients in Asia are you willing/able to make? Do you know what that will entail (i.e., how often would such clients expect you to fly back to Asia...is that feasible for you)? How long are you willing to invest in China if the immediate results are not promising? What's the realistic potential profit you're looking at, even if you do make headway in that market (i.e., what are your shipping or other costs to continue to have a presence there)? Are you aware that some experts suggest you had better be willing to invest for 8 years, and if you're not, it's foolish to even start?

None of that is communicated in the data that the market in China is now the 2nd or 3rd largest (depending on the year) in the world. Therefore it's naive to interpret that data alone as a reason for doing a fair in China.  

I know all that seems obvious to many dealers, but let's look at another less obvious example of the irrationality with which many approach such data. At about the 1:16:30 mark in the video, someone I assume is a German dealer seems rather emotionally upset that McAndrew's report indicates that France (by one measure) or the UK (by another measure) has a more important art market than Germany. His argument seems to boil down to his feeling that "important" should be measured by the quality of the art in the galleries, which I empathize with, but which is, again, entirely irrational to expect a market report to incorporate into such data. I mean, I understand why he would object to such hierarchies being misunderstood by the buying public, but the data isn't demanding that it be misunderstood. That's being done by people not limiting their own conclusions to the carefully worded descriptions of the data.

Given the reluctance of dealers to share more of their sales data openly (and by "openly" I mean via anonymous surveys or other non-public-disclosure means), I'd say we're a long way off from any such report being able to tell dealers the kinds of things they'd love the collective data to tell them. It's a classic Catch-22.That's not to say such reports as they exist are not interesting or useful within a carefully considered context, mind you. Just that I think the more exposure dealers have to such data and how it could help them strategize on where to invest in their businesses, the more they'll appreciate the role they personally could/should play in enabling better data to be gathered. Like any analytical system, how useful the information is that you get out of it is entirely dependent on the quality of the information everyone is willing to put into it.