The art market is fascinating. Particularly from a marketing perspective.
Why?
Because the industry is largely based on perceived value and marketing/sales ability.
For example,
I work with a client who owns an art gallery.
They represent wonderful artists and show beautiful work.
The gallery sells to collectors and makes good money doing it.
How do they do that?
They reach collectors through the following marketing channels:
Retail space
Email list
Social media
Print advertising
Events
A percentage of the connections that happen through these avenues turn into customers.
Which makes sense.
Some version of that is how nearly every business operates.
That's not why it's cool.
It's cool because the value of art is entirely based on perceived value.
What do I mean by this?
The value that a collector puts on a piece of art has nothing to do with the cost of the canvas and paint.
It has everything to do with:
Their view of the artist
Their reputation
The location that the work is shown to them in
What the art represents
How the work makes them feel
Who is associated with the work
In other words... the value is in the brand.
The art dealer can attach a higher than average price to the brand. If the customer subjectively believes the perceived value is worth the price, they'll pay it.
This is interesting because
When the value of something is subjective, it gives the seller a high degree of control of the price.
Point is...
The entire business is based on brand plus an ability to drive and convert leads.
This is more true in the art world than most other businesses
The people who succeed in this space are
skilled marketers more than anything else.
Peter Lik is a good example.
Many in the art world are outraged by his highly commercial practices.
But that makes me laugh because the high end galleries... you know, the type that are based in New York and deal with museums... have more in common with him than they would like to admit.
In reality, the only difference between them is their brand.
Peter is someone who didn't align himself with the exclusivity of high end galleries.
Instead of building relationships with collectors by deploying undercover social climbing sales reps on high society.
It appears he built his business around targeting tourists with disposable income. Rather than the secretive, wealthy buyer that is typically associated with pricey art.
I first learned about Peter when I stumbled across press about him selling the most expensive photo in the world.
So I dug in a little deeper and came across a New York Times article.
Read through a marketing lens, the piece does a pretty good job of mapping out his business. Which essentially breaks down to three parts:
1) Opening retail locations in high foot traffic vacation destinations
(get in front of people when they are more likely to spend money)
2) 'Wow' (engage) customers with color and scale
3) Sell based on a sense of urgency via sales reps in the gallery
(his work goes up in price as more copies of the same piece sell)
So, being the marketing nerd that I am...
When I stumbled across his La Jolla gallery on vacation, I had to go in.
When I stepped foot in the gallery I entered a warm space that was easy to be in.
There were huge prints of vibrant photos on the walls in front of me and to my left.
To my right, a sales person was talking to a potential customer about how the price of a piece they were interested in would go up as more copies sold.
After looking around for a moment I started chatting up another rep because I was curious about their sales process.
She tells me that Peter has more than 200k collectors.
(social proof... probably a little too much but hey, it works for them)
Then she takes me into a dark room with a couch, two photographs and a dimmer to show me how the colors change in different light. (romanticizing the art)
I left after that but I bet the next step would have been to hone in on a piece that I liked. Then I probably would have been told how many editions had been sold and how the piece will go up in price as more are sold.
(urgency)
The whole set up and process catered to selling work to a tourist with money and from what I've read, Peter is making great money doing it.
According to ZoomInfo Peter Lik's galleries do $62.4M in revenue.*
Where PACE Gallery, a high end operation in New York, does $15.2M while employing more people than Lik.*
*Data sourced from ZoomInfo
On one hand you could make the argument that Peter had to sacrifice his reputation to do as well as he has.
On the other, they are just two different brands serving different segments of the art market.
That brings me to my points:
1) Artists and gallery owners who are good at marketing and sales can make a ton of money selling art on the basis of the perceived value of their brands. (they get to dictate what that brand is)
2) Selling art is essentially a pure marketing play
3) High end galleries (the kind that would be disgusted by the way Peter is operating) are generally doing the same thing. The two primary differences are their brand and their target customer.
If you want to lean more about how high end art galleries operate
This documentary gives a useful glimpse into that: https://theartofmakingitfilm.com
But surprise, surprise... they're not so different. One of the galleries discussed employed at least a hundred sales reps across the globe. (Although they most certainly don't call them that)
In the high end market provenance is a major selling point.
'The Art of Making It" discussed how picky galleries are about who buys their work and where it goes.
There was even a line that mentioned if a collector has promised a piece to a major museum they are more likely to have the opportunity to buy the piece.
Which makes sense.
The provenance increases the perceived value which is realized the next time the work is sold.
Anyway,
I'd be just as interested to talk marketing with Peter Lik as I would with Marc Gilmcher, the CEO of Pace Gallery.
If you made it to the end, send me an email: garrett@garrett-ramos.com I want to hear what you think.
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