The Gray Market: Why Data Will Never Become More Important Than Schmoozing in the Art Market (and Other Insights)
Our columnist on why art-market analytics, as popular as they have become, will never tear the social fabric holding the business together.
Every Monday morning, artnet News brings you The Gray Market. The column decodes important stories from the previous week—and offers unparalleled insight into the inner workings of the art industry in the process.
This week, stepping outside the art world to get a better view of its contours….
On Wednesday, Farhad Manjoo of the New York Times wrote what was, in my view, the week’s most consequential story about the future of the art market. But you may have missed it, because… well, art is never actually mentioned. Take one look at the piece’s headline, though, and I suspect the connection will begin to materialize pretty quickly.
That title, you ask? “The Global Economy Runs on Parties You’re Not Invited To.”
The piece hinges on Manjoo’s insights from attending Cannes Lions, which bills itself as an “international festival of creativity” but, beneath the elegant branding, is effectively a weeklong advertising conference in the south of France. Billowing around the conference like an airbag made of mink fur, though, are a series of extravagant dinners, branded parties (sometimes featuring star musicians and DJs), and enough rosé to float 1,000 Hamptons summers.
And if anyone working in the art world in any capacity can manage to read about Cannes Lions without thinking of a high-end art fair, their loved ones may want to check to make sure they haven’t dissociated from their pasts. The parallels are too overwhelming to ignore. Which is all the more reason that I think the art market isn’t just an appropriate arena for Manjoo’s core lesson about the importance of socialization to global business. It may be the most extreme case on earth.
DENIAL OF SERVICE
While Cannes Lions has been around since 1954, Manjoo suggests it has only become a can’t-miss event for the ad industry in the past 10 years. The central figure in its transformation, at least in his telling, is Michael Kassan, the founder of MediaLink. Manjoo describes MediaLink as “the poster child for the rising importance of human relationships on a data-centric planet.” Its role is to connect ad-industry service-providers to potential clients at scale IRL. And in 2017, business-to-business event-organizer Ascential considered the firm’s contributions so valuable that it acquired MediaLink for a cool $200 million.
What kind of productivity has MediaLink delivered for that price tag since? During Cannes Lions 2019, Manjoo says the company engineered over 1,000 in-person meetings, most of them inside a purpose-built “beachfront villa the size of an airplane hangar.” (That description dredge up memories of a hulking, architect-designed Frieze tent for anyone else, or am I the only one who’s triggered?) And if you’d like some data points on what that means for Cannes Lions’ bottom line, consider that a digital-only pass to the festival cost €195 ($222) this year, and that multiple tiers of its much pricier admissions packages sold out, including its €3,995 ($4,541) CMO Accelerator Passes and its €8,499 ($9,661) Complete Platinum Passes. There was even an application-only Yacht Pass available for €25,750 ($29,271) plus taxes.
As a reminder, Art Basel Miami Beach will charge paying visitors $145 for a four-day pass this year. Dear reader, this is the first time an art fair has ever sounded like a relative bargain to me.
Back to the importance of data to Cannes Lion and its clientele, though. Even in an economy that, across sectors and industries, prizes numbers like never before, the ad business has been unusually eager to tailor its processes to analytics. But the grand irony is that doing so hasn’t necessarily given its decision-makers more confidence about their choices. In fact, there’s some evidence that they feel even less secure than they did before.
Here’s Manjoo again:
In every conversation I had at Cannes, I caught a major whiff of skepticism about whether the data that lies at the heart of the ad business were really telling the whole story. As Facebook, Google, YouTube, Twitter and other ad-driven tech platforms weather scandal after scandal, the people who run major brands feel increasingly adrift. They need to make gut calls about where to spend their money, about what their brands should stand for, and about how to navigate sensitivities like race and gender inclusiveness in a world ruled by social media outrage. That’s where the schmooze, consultants, middlemen and intuition come in: to help companies make high-dollar gut calls about data.
Think about this for a minute: the ad industry has vastly more, and vastly better, data on its business than the art market; data has been more quickly, and more thoroughly, embraced as the central pillar of advertising strategy than art-market strategy; and instead of this shift reducing the importance of in-person networking in the ad space, it’s made in-person networking more important! All that has changed, as Manjoo points out, is the identity of some of the oracles, gatekeepers, and liaisons standing in the middle of advertising deals—because of course you want the analytically versed vanguard, not the old guard, to tell you what to do with the numbers.
So why on this spinning, tortured planet should we expect anything different to happen in the art market?
The paradox of Cannes Lions is even more noteworthy because, in general, there is no imperative to see the actual end result of ad work in person. You don’t really need to experience a proposed billboard in situ to understand whether or not it gets the job done. And what would seeing a TV spot or a piece of online branded content “in person” even mean?
The art market is so far on the opposite end of the spectrum that you need a space telescope to see it. Yes, I’m comfortable saying that more art than ever is being sold online and via emailed JPGs. But buyers and sellers alike still place a premium on the importance of seeing much, if not most, artwork IRL before striking a deal. And it isn’t even just the continued existence and importance of art fairs that supports this idea.
Consider that Gagosian, which launched its online viewing room during Art Basel 2018 specifically to give clients a way to buy work without traveling to Switzerland, didn’t just decide against repeating the concept for the fair’s 2019 edition. Instead, the gallery opened a permanent location in Basel to coincide with the fair. As evidenced by its online sale of a $6 million Albert Oehlen a few months earlier, it would be dubious to assume Gagosian is abandoning blue-chip e-commerce. But the freshly founded Gagosian Basel is still a strong signal in favor of the human element’s enduring market power in the digital age.
Which is why I suspect this summary from Manjoo explains why many of us will still flock, right on schedule, to Miami Beach in December—no matter how much we might complain about it.
Even though we have all given ourselves over to data, human relationships lubricated by human pleasures still matter to every industry. Indeed, they matter more, because the few humans not replaced by machines have more power now than ever before. As went the ad business, so will go the rest of the economy: The robots may take over—but for a certain class of moneyed titan, the beaches will always remain topless, the drinks bottomless, and high-end schmoozing will never die.
No matter how much market data quants and pseudo-quants like me pump out in the next six months, another sun-soaked, party-powered, revenue-rallying trade fair will magnetize buyers, sellers, and everyone in between to the same destination at the same time. After all, we’re social animals. Cold logic can only influence our warm blood and hot doubts so much.
That’s all for this week. ‘Til next time, remember: even pleasure is sometimes just business.
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