Prices at international art auctions: Great art or marketing?

Currently, the role of marketing for prices at international art auctions is challenged. While high prices are labelled a “marketing stunt” [1], new technology and new generations are changing the marketplace. According to Dirk Boll, “marketing has overtaken canonization” [2] – the traditional selection and recognition of artworks within art history by designated experts and institutions. This fact increases the urge to revise the power and limits of marketing for art auction prices.

Banksy, Da Vinci or Beeple

Everyone has encountered at least one auction record in the news, like the shredded Banksy [3] [4], the 450$ million Da Vinci [5], or the 69$ million Beeple NFT [6]. The question is: Why are these artworks worth millions of dollars? Are record prices the result of marketing or a mirror of artistic genius [7]? While the existing literature focuses on the quantification of single price determinants, professionals emphasize the role of unquantifiable factors for art prices, such as artistic value and canonization. Particularly in the changing marketplace, a comprehensive understanding of prices at international art auctions is vital: for dealers, sellers, and buyers to handle the increasing complexity of the art market including the growing amount of data.

Auction Records: A Mirror of Artistic Genius? Or the Result of Marketing?

For theory, it is equally important to understand prices at international art auctions in their complexity, not just as a number or index. However, the existing literature is interdisciplinary and fragmented. Most studies use quantitative methods to analyze the impact of single price determinants, from artist’s gender and sunshine to terrorism. These studies fall short of clarifying the inherent valuation mechanism of the art market. Especially, they do not do justice to the importance of unquantifiable factors, like provenance or canonization. Until today, there exists no framework of the auction price mechanism that accounts for this complexity.

Bridging Between Art History and Business

This research links and enriches the interdisciplinary and fragmented literature about prices at international art auctions with in-depth qualitative research at the biggest international auction houses. It merges the scientific evidence on quantifiable price determinants with the long-standing expertise of auction house professionals. On this basis, it develops a conceptual framework of the art auction price mechanism. It synthesizes statistically significant price determinants, illustrates the inherent art valuation mechanism, and accounts for contemporary issues, such as new generations and new technology.

Understanding the Power and Limits of Marketing

Much of the existing literature on prices at international art auctions is criticized by practitioners as esoteric number-crunching, as either irrelevant or inadequate to explain art prices. However, quantitative methods are required to identify statistically significant price determinants. Nevertheless, a combination with qualitative methods is also required. This research argues that one must assume an interdisciplinary perspective and combine quantitative and qualitative price determinants: to fully understand art auction prices, and to identify the true power and limits of marketing.

So what?

The art auction is a socially constructed, interactive and marketing-influenced sales situation. As such, prices at international art auctions are influenced by diverse quantifiable and unquantifiable price determinants, and affected by economic, social, and political issues. All price determinants together form a network of relationships and mutually influence each other. Understanding this relationship network is important for dealers, buyers, and sellers to navigate the increasingly complex market.

You can also watch Laura Noll’s dissertation topic as a short video: Hier klicken!

[1] https://news.artnet.com/market/beeple-everydays-controversy-nft-or-not-1952124
[2] https://www.handelszeitung.ch/unternehmen/christies-prasident-dirk-boll-der-gewinn-bei-nft-ist-signifikant-hoher
[3] https://www.sothebys.com/en/buy/auction/2021/british-art-modern-contemporary/girl-with-balloon-2
[4] https://www.sothebys.com/en/buy/auction/2021/contemporary-art-evening-auction-2/love-is-in-the-bin-2
[5] https://www.artsy.net/article/artsy-editorial-450-million-leonardo-da-vinci-expensive-artwork-time
[6] https://onlineonly.christies.com/s/beeple-first-5000-days/beeple-b-1981-1/112924
[7] https://www.nytimes.com/2017/11/16/opinion/columnists/salvator-mundi-.html