Branding, also known as name recognition, is a shortcut. We are used to it in consumer products of all types including entertainment. With name recognition a person has a shortcut to identifying possibly worthwhile products and ideas. Myself am trying to "brand" my artwork using the name "Middle Border Artist" to give the idea of realistic art based on Midwest scenery.
In the higher echelons of the Art World covered in this book all the major players are branded: museums, dealers, collectors, art galleries, artists, auction houses (try naming an art auction house other than Christies and Sotheby's off the top of your head) and even cities (New York, London, Paris have more cachet than Milwaukee, Minneapolis or Seattle) Museum branding convers status (for instance compare The Metropolitan Museum of Art, the Guggenheim or the Tate as opposed to a museum in Philadelphia or even Winona, MN (Minnesota Maritime Art Museum). An artist's work can triple in value just by being in a branded gallery.
A branded artist (for example Damien Hirst) can have just about anything with his or hers name on it accepted at a premium value. Of course to be a branded artist you have to be accepted by all the branded dealers, museums, auction houses, etc.
Because of branding many purchasers of Contemporary Art buy sight unseen, just on the recommendation of a branded dealer offering the work of a branded artist. Many newly rich Russians, Japanese and Chinese go this route. They are looking for instant world status as connoisseurs.
The next two chapters in the book cover the convoluted, ritual world of branded auction houses and dealers. The amount of money exchanged hands is often used for publicity purposes and even when there wasn't that much money involved, there are manuverings to make it seem more. The author, Mr. Thompson can do a much better job in describing pricing, bidding and paying for the art. Branded art galleries are designed to be intimidating to visitors. Unless you are a known "person of high net worth" they can't afford to spend time on casual visitors.
This is a strong contrast to the galleries on Canyon Road in Santa Fe, NM, where they were solicitous of an overweight, middle-aged woman, offering her water to drink, a place to sit and willing to talk about the artists. (Thank You!)
For both dealers and auction houses, carefully choreographed publicity campaigns are important. Auction houses also have beautifully printed catalogs to increase interest in their offerings. They are very picky about where the artwork is reproduced and reviewed in magazines, shown in special museum shows and lended to certain potential buyers to "try out".
There is strong competition among dealers and auction houses to get consignments: offering high guaranteed prices, advance money to the consignor, meeting consigner's demands for promotion and other deals. Auction houses are aggressive in finding consignors often by checking the obituaries for the deaths of any prominent collectors.
Dealers offer new works by artists and spend much time and money promoting new artists who have made their way from lesser known dealers to the branded ones. But the main profits are from the secondary market-reselling works from collections. It is a gamble to take on new artists, only one artist in two hundred that are in branded galleries will have his or hers work reach the branded auction houses.
If an artist is falling out of favor and can't get the previous prices, the dealer will drop him. They much rather do that than offer discounts since previous buyers would find out and be unhappy. But dealers are willing to exchange artists among themselves since it is OK to have lower prices at a new dealer.
The private dealer or art consultant don't actually handle any artwork personally. He or she works out of an apartment, troll the art news sources and often make cold calls offering to resell an item to another collector privately and get a small percentage. They also develop relationships with collectors and guide them to appropiate artworks for sale. Obviously networking skills are very important.