The title of McKinsey & Company’s 2011 report on big data was telling. It succinctly described this expansive and burgeoning technology as representing “the next frontier for innovation, competition and productivity”. In short, it is a game-changer.
Once exclusive to the sphere of big business, especially in technology and financial industries, big data’s open, malleable and universal framework is finally being tapped into by all sorts of organisations and sectors.
ArtRank is just one of many institutions that are making use of data to deliver new insights, new ideas and new services in the world of art. Radical, different and provocative, its novel offering has divided opinion.
Adopting a multidisciplinary approach, ArtRank utilises the expertise of a data scientist, an art professional and a financial engineer to identify “prime emerging artists”.
Based on their analysis of data, which they collate using qualitatively weighted metrics’ – including web presence, studio capacity and output, market maker contracts and acquisitions – they then determine which artists are worth investing in and which are not.
The algorithm behind ArtRank, which formerly went by the name of sellyoulater was first developed for an emerging art fund in 2012 and was found to be highly powerful and accurate. Over a 16-month period, it helped deliver a 4200 per cent return on investment.
“The algorithm is comprised of six exogenous components: presence, auction results, market saturation, market support, representation and social mapping,” the company states on its official website.
“Each component is qualitatively weighted in service of defining a vector or ‘artist trajectory’. We compare past trajectories to help forecast early emerging artists’ future value.”
The data used to inform its index, which is updated quarterly, comes from what ArtRank calls a confidential network of dealers, advisors, auction houses, collectors and journalists.
Information is provided on a quid pro quo basis – in return for the data, this network is informed of the latest developments and “reciprocally recompenses” ahead of public announcements.
What has to be understood about ArtRank and its place in the art world is that it exists as a purely financial venture, which it is candid about. The algorithm it uses to determine worth is based on the “intrinsic value” of a work of art and therefore not its “survival value”. Aesthetics and sentiments do not come into it.
“We provide clarity in an opaque market by providing actionable forecasting to collectors and institutions seeking entry to the emerging art market,” ArtRank has stated.
“Collectors and institutions interested in obtaining our reports ahead of the general public can be alerted of such opportunities by subscribing. By purchasing early reports, institutions and collectors are made privy to important insider information that can assist in making acquisitions at a fraction of secondary resale prices.”