Fuelarts
Editorial

Alliance of Articker and Phillips: the Future of Art Analytics or the Advertising Move of the Auction?

By 2020, Phillips had remained the only largest auction house in the Old World without its own high-tech analytical tool designed for personal use and to better integrate buyers into the auction process. In 2015, Christie's acquired Collectrium, a ready-made digital collection management service, (and a database of 25 thousand collectors). A year later Sotheby's bought their index of pieces of art from David Mei and Michael Moses, unequivocally hinting to its customers: all our offers are verified with the market and have growth prospects. Finally, Phillips also announced the introduction of modern technologies early in August, 2020. As it turned out, cooperation with the startup Articker (founded in 2014) had lasted since previous summer, but then the product was finally integrated into the structure of the auction and the art alliance was made public.

What is Articker in simple terms? This is Artprice for non-auction artists, or for collectors, who are not satisfied with the results of public sales and want to make a choice in favor of one or another author based on his/her public activeness: exhibitions, publications, the presence of the artist in private and museum collections, his activeness in social networks, and the frequency of  his/her name being mentioned in mass media. You may ask: has this not happened before? The answer is: similar platforms existed, but they were all scattered. Artfacts provided information about exhibitions, awards,and galleries (lobbies) of the artist, Larry's List noted the availability of his works in large private collections, Magnus Resch correlated the fame of exhibition venues with the fate of the artist, Baer Faxt supplemented the picture with rumors and inside information (i.e. paid rumors), and the Mei & Moses Index drew a price dynamics curve based on the auction data. Articker has set a goal to unite all platforms into one.

Early in 2010s, when the reports on the amounts of the art market started to be published (Deloitte Art & Finance, Art Basel & UBS, TEFAF and Artprice), their compilers were reproached for "one-sidedness" — it was said that only the visible part of the market was subject to sober assessment (auction), barely reaching half of all sales in the art industry. The situation was partially corrected by Clare McAndrew, having developed a system of accounting for the closed sector — galleries and private dealers. However, the solution to the main problem of collectors — assessing the artist's prospects before he/she was put up for auction or a contract with a large gallery — was either left to the mercy of private art consultants, manually calculating ingenious tables, or was reduced to the trust-me assurances of art dealers. The outcome for the collector was usually the same: the odds were reduced to the original 50/50.

What prevented Articker from developing the product earlier, if the company opened in 2014, and there was a market demand for such a service? Moreover, since about the same time, about a dozen ArtTech startups have been fighting and continue to fight over the creation of closed market indices. Having analyzed the market, four reasons for unforced inhibition can be pointed out:

• Working with large amounts of information in the mid-2010s did not reach the level that would allow tracking all informational reasons related to the artist without exception: in particular, reacting to activities in social networks. In addition, a lot of the data had to be collected manually (i.e. additional costs were required).

• Taking into account the potential number of requests, these data had to be further provided for processing by artificial intellect. And if the mechanics of manual calculation were more or less clear, the things were not going smoothly as far as it concerned artificial intellect (which has become increasingly referred to since 2019 as "machine learning").

• From the point of view of an institutional (professional) investor, a startup should begin with one idea or market segment. And working with a closed market called us to see too much of the world at once. Thus there were problems with financing the work.

• Major galleries (strategic investors from the "environment", familiar with the market) did not want to let outside researchers into the inner kitchen of pricing and mechanisms for promoting artists, and auction houses bought ready-made solutions simultaneously with the client base. Besides, private market indices were not of particular interest for auctions ...

... unless the auction house had close contacts with young artists, serving as a kind of gateway from the closed to the public market. As a result, such a partner of Articker became Phillips — a British auction with Russian roots, focused on contemporary art and young collectors, dynamically developing after rebranding. It is no secret that many authors began their auction careers precisely with sales on Phillips. Accordingly, it is their clients who should be interested in analyzing unknown names by indirect indicators: how transparent is the poke with the pig they are buying? Articker, now integrated into Phillips, should become an indicator of market confidence in young artists — and then in an auction house that presents their works in the form of lots.

Today, the Articker database contains about 150 thousand artists, whose art motions are tracked in 16 thousand sources, from specialized art media to social networks. These are millions of publications supplemented daily with 5-7 thousand units of new data. In fact, the product being made is a search engine in the art world, which should at least be able to answer the question "Why is this artist riding the wave?" And as a maximum, it should become a tool for reasonable investment with proper analytics. Speaking about "proper analytics" we mean the work of that very artificial intellect, because in addition to statistical data, Articker in its beta version is already introducing a system of indexing and ratings. For instance, what happens if 99 out of 100 media would write about the arrest of an artist for real offense? What if he/she is arrested for participating in an anti-violence demonstration? It is the built-in computer brain that should assess the quality of the event and correlate it with the development or decline of a career. We hope that the assessment criteria will one day be made public.

“Everyone will write about an artist after a success at the auction — but try to find publications <about him/her> before the auction today, said Articker founder Tomasz Imieliński in an online interview for ArtTactic. — What we offer looks like investing in startups: by investing in 20 young companies, the investor will receive financial returns in 2 cases and will be happy about it. We do the same with regard to young artists — only, according to our estimates, there will be at least 2 out of 10 “lucky hits” in the art that is growing in price”. It is hard to argue with these figures if you do not know others: according to Magnus Resch, founder of Larry's List, only 240 out of 32,000 artists born between 1950 and 1990 were able to make the "leap" from mid-level galleries to the most prestigious museums and galleries in the world. This means that the predicted career success rate is on average 0.75%. Accordingly, the "2 out of 10"  declared by Articker & Phillips means an increase in the collector's forecast reliability by at least 26 times. This is possible in theory, although with one weighty "but" that often arises during a merger of companies: the auction house must assure the independent development of the analytical portal, minimizing rumors about the possible servicing of corporate interests.

The latest innovation that Articker and Phillips have publicly announced is the Related Artists feature, opportunity to find paired groups of young artists with similar marketing activities. In fact, this is a transformed idea of Carter Cleveland, the founder of Artsy: according to the original idea, the platform was supposed to help the collector choose art on the assumption of his/her own tastes, based on a combination of colors and styles.

The only difference is that the taste of today's collector is determined by marketing.