Case Study by Vivian Chong

Source: Artlogic Media Ltd.

CASE STUDY: ABSTRACT The following is a holistic case study on the art technology firm, Artlogic. Founded in 1999, Artlogic aims to create integrated online solutions for the art world to reduce repetitive data entry and create aesthetic, easy-to-navigate dashboards. Frustrated with previous systems, Artlogic established the first online art database as a move away from paper inventories to boost efficiency. However, over the years a growing number of collections management system competitors have come to market. In order to stand out, Artlogic continues its commitment to innovation by partnering with third party companies and tools in order to consolidate services to offer its clients seamless user experience. Artlogicâ&#x20AC;&#x2122;s strength comes from being a product-first company, underscored by the developerheavy hiring. With its product, it appears to be in good shape to take over majority market share despite the saturation of the art database landscape. This case study offers recommendations to combat Artlogicâ&#x20AC;&#x2122;s threat of substitution and potential threats of to their clientsâ&#x20AC;&#x2122; data security.

Source: Artlogic Media Ltd. CONTENTS 1 | ORGANIZATIONAL STRATEGY AND AIMS 1.1 Mission, Vision, Core Values 1.2 Analysis of the External and Competitive Environment 1.3 Analysis of the Internal Resources, Competencies and Capabilities 1.4 Key Stakeholders, Key Partners, Key Buyers 1.5 Target Market, Consumer Needs Being Met 2 | ORGANIZATIONAL STRUCTURE 2.1 Leadership, Top Management Team 2.2 Employee Base and Characteristics 2.3 Management of Creativity 3 | MARKETING STRATEGY 3.1 Advertising, Marketing, Promotion, and Publicity 3.2 Elements of Differentiation 3.3 Sales and Pricing Strategy 4 | CULTURAL STRATEGY 4.1 Impact on the Art World 4.2 Aesthetic Vision of the Organization 4.3 Artistic Innovation 5 | RECOMMENDATIONS, RISKS, AND OPPORTUNITIES 5.1 What are the key risks faced by the organization and needs to consider and plan for? 5.2 What are the key opportunities that it can take advantage of? 5.3 What should the core recommendations for success be going forward? BIBLIOGRAPHY APPENDIX

1 | ORGANIZATIONAL STRATEGY AND AIMS

1.1 Mission, Vision, Core Values Artlogic’s company mission aims to create integrated online solutions for the art world by “provid[ing] beautiful websites, a fully featured inventory management system, an iPhone and iPad app” and other products (ArtLogic, 2017). Their vision is to become the leading firm in the art industry that streamlines the collections management workflow by providing a clean and user-oriented dashboards to match their clients’ aesthetics (ArtTactic Podcast, 2016). Their core values revolve around providing logical user experience to become the one-stopshop for art galleries, institutions, artists, and collectors from collections databases through exceptional designs from comprehensive databases to mailing systems and branded reports. 1.2 Analysis of the External and Competitive Environment Artlogic exists is both the art tech and collections management spheres of the art world. Art tech is a growing industry populated mostly by startups including Arthena Fine Arts, Artspace, Auctionata, Paddle-8, and S[edition]. Other players include Amazon, Artnet, Artsy, and E-bay. Table 1 breaks down an external environment analysis of the company. PESTLE (External Environment Analysis) Political

- Brexit — Artlogic is based out of London - current political climate remains uncertain - also does business with international clients

Economic

- UK economy is looking uncertain - GBP has dropped since 2016

Social

- there has been a move for art collections to migrate paper/offline databases to cloud-

Technological

Legal

based systems in order to keep up-to-date and increase efficiency by having one consolidated system that is also searchable galleries, artists, institutions, etc have seen the importance of having a strong online presence and how much impact an attractive website can have with its global and mobile consumer bases art fairs and international sales have increased the demand for galleries to have offline, private-facing databases to sell works to clients growing demand to build in e-commerce shops on websites of art gallery, artists, etc part of growing art tech industry cloud-based storage streamlining collections management process integrating reports into the system — ie. condition, insurance, etc innovating the concept of integrated databases by partnering with other third party companies/tools/solutions that clients might be using as opposed to splitting their focus and building it themselves partnering with companies to boost their product’s results and their client’s experience; ie. tech integration and search engine optimization companies

- tackle client confidentiality risks by incorporating multi-step verification security frameworks

Environmental

- reducing paper waste by migrating systems to cloud services 3

Table 1: PESTLE Analysis of External Environment Artlogic aims to provide services and technological infrastructure to art businesses to help them run more efficiently internally. Their products are privately managed, inward-facing tools with certain public facing dashboards. Table 2 dives deeper into its direct competitor environment. Direct Competitor Environment Product

Competitor

Traditional CMS*

Gallery Systems’ The Museum System PastPerfect Museum Software Re:discovery's Proficio Argus EmbARK Archivists' Toolkit MS Access

*CMS = Collections Management Software Online Solutions

Offline Solutions

- ArtSystems - ArtBase

Website Development

- any marketing firm - drag and drop, customizable websites; ie. Squarespace, Wordpress, etc

Other Services

Artbulter artcloud galleryManager by exhibit-E Collectrium Artbinder Masterpiece Manager Managed Artwork Collectify

traditional paper inventories mailing services like MailChimp conditions report systems like Articheck reports generated by insurance companies traditional letterhead designs for invoices, object reports, pricing list, etc

Table 2: Artlogic’s Direct Competitors 1.3 Analysis of the Internal Resources, Competencies and Capabilities Founder director, Peter Chater, created the first version of Artlogic in 1989 when working for the Karsten Schubert Gallery as a better way to manage its contacts database (arnet, 2016). Decades later the company’s core products still revolve around Chater’s original big-picture thinking for streamlining gallery operations and database functionality (artnet, 2017). Over the years Artlogic has also positioned themselves as a web design firm, therefore attractive and user-friendly interfaces are a top priority. As a result, the company’s most important internal resources are its directors and talent. Artlogic’s core competencies centre around its focus on design. It sets itself apart from competitors with simple and aesthetically pleasing interfaces, its emphasis on improving user

journey, the variety of by-products (ie. branded invoices, contact database, insurance reports, etc) built into the service, and the fact that once new companies start using Artlogic’s database or when older companies migrate their inventories into the service, they are less likely to leave as they would have to uproot their data once again (ArtTactic Podcast, 2016). This business model not only ensures the company with initial set-up fees, but also ongoing maintenance and updates prolong the consume their consumer’s life cycle in the form of subscription plans, generating consistent revenue. In order to continue its competitive edge, Artlogic’s capabilities will require them to continue to hire the best developers possible, grow their sales staff, and keep up-to-date with changing technology. The company should continue its course of partnering with third party companies and integrating tools into their system to elevate their clients’ experience and retain their business (ArtTactic Podcast, 2016). As confidential information is the foundation of its company, Artlogic should continue to improve its security efforts. 1.4 Key Stakeholders, Key Partners, Key Buyers Key Stakeholders include the four directors, Artlogic’s major partners, their employees, and clients (Artlogic, 2017). Artlogic has several major partners that it collaborates with. They include Tagsmart, Vastari, Synergy, Cyber City, Go Up, Pelham Communications, and Sacra Mons (Artlogic, 2017). Table 3 offers a description of each of their partners. In order to provide the best service to its consumers Artlogic has committed to partnering with third parties with stronger tools or skill sets as opposed to splitting their focus and building different verticals; in this respect they are sticking to what they do best (ArtTactic Podcast, 2016). Partners Tagsmart

Tagsmart offers all-round complete secure solutions, from smart DNA tags to paper and digital Certificates of Authenticity. Galleries and artists using Artlogic can effortlessly verify the authenticity of their works using Tagsmart.

Vastari

Vastari is the world’s leading expert in placing privately owned works at temporary museum exhibitions worldwide. Vastari has placed hundreds of artworks in museums globally and gives access to 4,500 top museum professionals on the lookout for works to include in forthcoming temporary and touring exhibitions.

Synergy Associates

Synergy is a London based IT support company for the art and finance sectors committed to serving professionals and their clients across the world. They have a broad range of expertise in monitoring IT systems end-to-end, from mobile device management to cloud back up solutions to help their customers deliver better services to clients around the world at a lower cost.

Cyber City

Cyber City is a New York based IT Service management company that specialises in supporting artists and galleries. Whether starting out or a well established business Cyber City can support IT needs from server management to smartphone security with their experienced support professionals.

Go Up

Go Up is a London based digital marketing, design and SEO agency that helps companies ranging from large brands to SME’s. Their aim is to improve the reach and quality of engagement through web search optimisation, reputation management and social media strategy to ensure engagement of the maximum number of customers.

Pelham Pelham Communications is a provider of communications expertise tailored to Communications support the art world. Whether creating and launching a new brand, building media relations coverage or improving your social media coverage Pelham are able to use their breadth of skills to give you a brilliant service. Sacra Mons

Sacra Mons is an experienced art collection and management company with 30 years experience trading high value works of art and antiques. As well as this extensive knowledge of the art market they have also developed expertise in art management; supporting the ongoing management of art collections in a reliable and trustworthy manner.

Source: Artlogic Media Ltd.  Table 3: Artlogic’s Partners Early adopters like Victoria Miro Gallery and Hosfelt Gallery were essential to launching the first online version of Artlogic in 2006 (Artlogic, 2017). Today, Artlogic’s long list of clients include top buyers like British Film Institute, Royal College of Arts, Simon Lee Gallery, Sotheby’s Diamonds, and Thomas Dane Gallery (Artlogic, 2017). Table 4 offers a talley of Artlogic’s current client list (a more detailed list is available on their website). Key Buyers 248

Art Galleries, Advisories & Collections Public Sector & Non-Profit

Commercial

Artists

Source: Artlogic Media Ltd. Table 4: Artlogic’s Key Buyers 1.5 Target Market, Consumer Needs Being Met Artlogic has a fairly broad target market, spanning all art businesses that possess an inventory. This includes art galleries, advisories, collections, public sector institutions, non-profit organizations, commercial sector operations (ie. publications, marketing agencies, etc), and artists (Artlogic, 2017). Their clients needs are as follows: • digitize current database • create comprehensive catalogue of artworks, clients, etc • updated brand and image • consolidate current inventories • have an easy-to-use, full service system in place to run their operations Artlogic meets their clients’ needs by offering:

an online collections management system that can also be accessed offline through PrivateViews (their external App) create clean and updated websites provide system integration to other platforms generates built-in branded object reports, condition reports, client details, mailing lists, invoices, insurance reports, etc based on data entry • provide a safe system to maintain confidentiality • • • • •

2 | ORGANIZATIONAL STRUCTURE 2.1 Leadership, Top Management Team Artlogic is made up of four directors. David Hooper joined Peter Chater in 1999 as founding partners to set up the limited company and officially began traded under the name Artlogic (Artlogic, 2017). In 2006, Tom Brickman joined the board as Director of Design and Web Development, leading the web design division (Artlogic, 2017). Finally in 2015 Joe Elliot was promoted from Client Account Manager to Director of Sales and Marketing to promote the company and its products, pitch to potential clients, and generate sales (Artlogic, 2017). 2.2 Employee base and characteristics Artlogic is divided into three departments: Account Management & Sales, Design & Development, and Operations (Artlogic, 2017). The Account Management & Sales team is made up of four employees: Rich Buttrick and Angel Lin (Client Relations & Sales Managers), Jean-Baptiste Roux (Account Manager), and Joe Maderia (Sales Manager) (Artlogic, 2017). The Design & Development team is made up of nine employees: David Castle (Designer & Web Developer), Robin Fowler, Nick Farr, Hannah Knights, Miguel Villaespesa, Josef Barta, Tom Ledger, and Dan Hawkins (Web Developers), and Sabih Hasan (Programmer) (Artlogic, 2017). The Operation team is run by Steve Reynolds (Operations Manager) (Artlogic, 2017). In an e-mail correspondence attached to the appendix with Director, Joe Elliot, he mentions that the Artlogic team is “primarily comprised of developers” as the company was “always very much product first”, “though [their] sales team is now expanding as demand increases” (Elliot, 2017). Director Tom Brickman and lead developer David Castle come from graphic design backgrounds, and those “that aren't specifically designers” come from fine art backgrounds including web developer, Hannah Knights, and directors, Peter Chater and Joe Elliot (Elliot, 2017). Artlogic has made an effort in the past to hire designer developers “as [they] feel it works best when someone is capable of both jobs” (Elliot, 2017). Artlogic’s hiring process and employee base emphasis its strong intent on leading with its product and design, however also reveal that having a balance of fine art backgrounds on the team give them an insider’s perspective on tailoring their service to the art world by understanding their consumer’s pain points. 2.3 Management of Creativity Artlogic’s greatest competitive advantage is its design thinking and execution. Unlike the creative practices of programming patterns and curatorial approaches of traditional art organizations, such as museums and galleries, Artlogic’s design thinking comes in the form of

using skills, mental processes, and creative strategies to resolve the consumer need of perfecting the digital user experience (Visser, 2006). Clean designs, attractive visuals, and intuitive navigation are elements of Artlogic’s creative strengths that elevate its functionality and differentiates product from its competitors’. 3 | MARKETING STRATEGY 3.1 Advertising, Marketing, Promotion, and Publicity Despite being a digital company, Artlogic recognizes that the art world is based off of in-person exchanges and networking opportunities. Thus, a majority of their marketing and promotion involve going to art gallery openings and new museum exhibitions. They also have booths at fairs like Art15 London and present live demonstrations of their product at events like the Art Business Conference (Artlogic Instagram, 2017). Artlogic sponsors events within the art community, like their most recent involvement in Cure³ “an initiative that rose out of the collaboration between Bonhams, the David Ross Foundation and Artwise” by supporting their “website and online sales platform” (Tatler and Artlogic Instagram, 2017). They also work to educate those new to the art market on the art tech industry in order to gain brand recognition, gain referrals, and possibly target new adopters through talks at institutions like Christie’s Education, Sotheby's Institute, Frieze Academy, and Universitatderkunsteberlin (Artlogic Instagram, 2017). Outside talks also include panels with key figures in the art world like Melanie Gerlis of the Art Newspaper & Financial Times and Joe Kennedy of Unit London and interviews with the ArtTactic Podcast and news outlets like Artnet (Artlogic Instagram, 2017). Additionally, Artlogic leverages its online presence as its main form of advertising and promotion through its website and social media. Through its accounts Artlogic promotes its company culture and products as well as their current clients and their events, for example the latest David Annesley private opening of their client the Waddington Custot Gallery or the upcoming Baatarzorig Batjargal opening of their client the Jack Bell Gallery (Artlogic Instagram, 2017). Not only does this establish a long-term relationship with their clients, but doing so consistently provides Artlogic with material for content marketing that keeps them current and relevant in the industry. Table 5 flushes out the four P’s of Artlogic’s marketing mix. Arts Marketing Mix Product - an online collections database - PrivateViews (their offline, external App) - website design - generates built-in branded object reports, condition reports, client details, mailing lists, invoices, insurance reports, etc based on data entry

Price  - pricing breakdown in Section 3.3, Tables 7-9

Promotion - in-person networking at art fairs, exhibition openings, conferences, etc - sponsorships (ie. Cure³) - talks at art institutes (ie. Sotheby’s Institute) - interviews (ie. ArtTactic Podcast and Artnet) - social media — content marketing - press (ie. The Art Newspaper)

Place - online — website, social media, press - interact with current and potential clients at art events - talks at art institutes and conferences to demonstrate the product - office in Clapham Old Town, London - international client base

Table 5: Artlogic’s Marketing Mix 3.2 Elements of Differentiation While art databases are not a new concept, Artlogic differentiates itself from competitors with its design-oriented and intuitive user interface. Though it was first to market as an online art inventory, it has since stood out by incorporating multiple by-products into its system to avoid repetitive data entry that separate digital conditions reports, client mailing lists, price lists, and so on would require from separate competitors. It also actively partners with tools and companies that specialize in different consumer needs to improve the experience of its clients (ArtTactic Podcast, 2016). Through pitches, promotion, and word of mouth, Artlogic should gain traction and accelerate the company with consistent revenue as subscription databases presume long consumer life cycles since the client is less likely to migrate their data or learn a new system. Artlogic’s value proposition aims to promote itself as a one-stop-shop for running an art collection as deconstructed in Table 6. Core Product:  Collections Database, Website, App, By-Products Expected Product: Building client’s brand awareness (ie. website), assisting with sales (ie. through App), streamline the collections management process, give solution to monitor and maintain client’s collection Augmented Product: Insights to the art tech world, become part of Artlogic’s client network, future events/talks/workshops Artlogic might host Potential Product: Updated systems, future products (ie. more variety in reports), more security features, art tech innovation, up-to-date industry standard for website, Apps, and products Artlogic

Table 6: Artlogic’s Value Proposition 3.3 Sales and Pricing Strategy Artlogic’s three major revenue-generating offerings are their Database, Website, and PrivateViews verticals. They offer different payment methods (ie. subscription only or downpayment model) and tailors pricing depending on the purpose (galleries, artists, collectors, etc), features (full list on their website), and number of users (Artlogic, 2017). Tables 7-9 list the various pricing models. Database Subscription Only Model ArtLogic Pro (galleries, artists, collectors)

ArtLogic One (galleries)

ArtLogic One (artists)

ArtLogic One (collectors)

£180/mo   + £35/mo per extra user

£90/mo

£60/mo

Downpayment Model

Set up: £2500  + £400 per extra user

Set up: £1250

Set up: £995

Ongoing: £130/mo  + £20/mo per extra user

Ongoing: £65/mo

Ongoing: £40/mo

Source: Artlogic Media Ltd. Table 7: Artlogic’s Pricing Model for their Databases Website Template

Bespoke

From £2500  + £30/mo to host & support

From £8000  + £110/mo to host & support +ongoing fee £55/mo with gallery database system

Source: Artlogic Media Ltd. Table 8: Artlogic’s Pricing Model for their Websites PrivateViews Portfolio

Standard

Premium

£15/mo

£29/mo

£49/mo

Source: Artlogic Media Ltd. Table 9: Artlogic’s Pricing Model for their PrivateViews 4 | CULTURAL STRATEGY 4.1 Impact on the art world Artlogic was founded on the frustration of running a gallery on separate “photographic records, inventory sheets, artist CVs, neatly cut out press clippings” and inventories (Artlogic, 2017). Their solution to create an online database was a huge step in the digitization of art collections at the turn of the century. Simply by embedding itself firmly in the art tech community, Artlogic has helped raise the profile of the industry and other innovative products and companies by participating in panel discussions, attending conferences, and connecting with like-minded art players. By bringing design and programming perspectives to the art industry they have managed to create beautiful products that help organizations run more efficiently and set the bar high for the online branding and back-end operations of art businesses. This has allowed smaller businesses (ie. non-profit organizations, small galleries) to operate with limited staff and larger businesses (ie. art institutions, blue chip galleries) to function more efficiently. 4.2 Aesthetic vision of the organization As mentioned above, Artlogic prides itself with having a clean, minimal, and design-oriented aesthetic vision. In trying to create a seamless and logical user journey for its clients, it prioritizes UX (user experience) and UI (user interface). While the core of its product requires detailed data entry in order to produce multiple products like the database, client lists, reports,

and so on, the product’’s front-end experience is thoroughly thought out with design thinking solutions to optimize the client’s interaction. 4.3 Artistic innovation Artlogic has shaken up the industry by setting a high standard for impressions generated from websites. Especially in recent years, art businesses have seen the importance of having a strong online presence to tell their company stories better and want to create platforms that match the aesthetic and vision of their artists, collections, physical spaces, and so on. Artlogic’s products provide this digital solution (ArtTactic Podcast, 2016). Secondly, by streamlining the back-end processes of the client, Artlogic’s systems have made tedious processes faster allowing for more time spent on creative aspects of their client’s businesses. 5 | RECOMMENDATIONS, RISKS, AND OPPORTUNITIES 5.1 What are the key risks faced by the organization and needs to consider and plan for? The key risks faced by the organization would be threat of substitution or new entrants as it is not a unique product or business model to replicate. Simply being first to market is not enough in this industry, Artlogic needs to remain competitive with its innovation and offerings. The second largest risk would be the risk of data security as the inputed information tends to be confidential in this field. In order to prevent risks Artlogic has used multi-step verification codes to protect its clients but it might want to consider more complex processes like blockchain to better secure their clients’ data. Table 10 dives into an analysis of Artlogic’s strengths, weaknesses, opportunities, and threats. SWOT Analysis Strengths

design-oriented long consumer life cycle strong position within art tech industry strong relationships with key buyers different pricing models to fit client’s needs multiple promotion channels already have established press outlets discussing the product/company involved in the art tech world — aware of upcoming art and tech trends

Weaknesses

not a unique product difficulty convincing clients of data security difficulty convincing clients to migrate from existing system lots of competition

Opportunities

consolidate existing inventories streamline gallery operating processes offer more by-products (ie. reports, etc) create more partnership opportunities hiring developers to keep up with innovation movement from analogue and offline solutions to online solutions growing importance of online presence

Threats

threat of new entrants (ie. new CMS, etc) threat of substitution (ie. new web design firms, etc) data security of clients threat of changing technology

Table 10: SWOT Analysis 5.2 What are the key opportunities that it can take advantage of? Key opportunities that Artlogic should consider would be continuing its approach to hiring top talent that is design-focused, but it would also be to their benefit to balance their staff with fine art backgrounds to better understand the pain points their clients face. The company should also work towards offering more products that fit with their clients needs, for example more reports that could be compiled from information inputted at the time of data entry. Lastly, Artlogic is on the right path of optimizing partnership opportunities as they cannot divert their attention to too many dissimilar verticals. Leveraging integration deals with other companies/tools and growing their client base with their existing client list are crucial steps set them apart from competition. 5.3 What should the core recommendations for success be going forward? Core recommendations for success moving forward would be to expand the sales team, continue to hire innovative thinkers, find opportunities to integrate other tools, cultivate its partnership list, and remain deeply embedded in both the art and tech worlds in order to forecast upcoming trends and disruptions in the industries.

BIBLIOGRAPHY Artlogic (2017). Artlogic. Available at: https://artlogic.net artlogicmedia (2017). Instagram. Available at: https://www.instagram.com/artlogicmedia/ artnet Asks: Peter Chater on Dragging the Art World into the 21st Century (2016). artnet. Available at: https://news.artnet.com/art-world/artnet-asks-peter-chater-674816 Cure³ art exhibition party at Bonhams (2017). Tatler. Available at: http://www.tatler.com/ bystander/events/2017/march/cure3-art-exhibition-party#!/23327/image/1 Elliot, J., joe.elliott@artlogic.net, 2017. Re: ArtLogic Lecture at Sotheby's Institute. [E-mail] Message to V. Chong (vivian.chong@live.ca). Sent Fri 2017-01-27 1:07 PM. Available at: https:// outlook.live.com/owa/?path=/mail/search/rp [Accessed 15 March 2017]. iTunes. (2016). ArtTactic Podcast. (podcast) Available from http://arttactic.com/podcast/joe-elliotartlogic/ Visser, W. (2006). ‘The Cognitive Artifacts of Designing’, Lawrence Erlbaum Associates: Mahwah, NJ, USA.

APPENDIX 3/19/2017

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