Why some of the major brands have skipped SXSW this year

Last year, McDonald's debuted a VR experience at SXSW that let users paint a Happy Meal

March 10th was the start of the 31st edition of SXSW in Austin, a festival that has mastered bridging together the worlds of tech, film and music. Its humble beginnings started with staffers at The Austin Chronicle and a name that was inspired by Hitchcock’s movie, “North By Northwest.” Today, the festival boasts around 30,000 registrants and artist wristbands, helping boost the local economy north of a healthy $300m. The attendee count is misleading, as I am one of thousands who make the annual pilgrimage to Austin and rarely if ever register or buy a wristband.

My first SXSW was in 1998 and it had a local feel to it; I don’t remember seeing the presence of any major brands bar a few music related companies and alcohol. However, as the festival grew, so did the footprint of corporations. It started with global brands that had real legacy in music like Levi’s, but then grew to just about everyone from Oreos, Doritos, IBM, Pepsi – the list goes on and on. So after years of saturation by brand collaborations, it seems that some major brands are not doing major executions on purpose at this year’s SXSW. In fact, Do512's President, Jimmy Stewart, noted last week that the number of SXSW parties on his event website is about a third of last year's total.

I’m heading down at the top of the week, but I already know that Samsung and Spotify will not have their usual large footprint and other SX stalwarts like Fader Fort are cutting back. Why is that?

Fader Fort this year has moved from it’s home of the last few years to a smaller venue. The area is no longer considered an outlier of downtown, but instead prime real estate and is a victim of property developers. The Fort, which started as a collaboration with Levi’s, is scaling back to be more in tune with the original vision to be more about discovering emerging artists.

Samsung over the last few years has had a huge footprint and presence at SXSW, and the brand itself fits comfortably with the interactive and music portions of the festival - from last year’s Samsung House to Galaxy Life concerts, to past shows with Prince, Jay Z and Kanye West. However, this year Samsung is sitting it out, even with the impending launch of Samsung Galaxy S8 at the end of this month. Does this mean that SXSW is no longer seen as crucial to their marketing plans?

Another example of a brand that is sitting it out this year Spotify -- the music streaming platform has presented their Spotify House over the last few years and chose this year not to do so. This has been a festival highlight for many attendees with its excellent curation and a perfect blend of emerging and established talent, so why are these brands staying away this year? Is it just a matter of sitting it out for a year, or has SXSW lost its mojo for brands?

Many have complained that over the last few years the festival has become too mainstream and cluttered, making it extremely expensive to do a brand activation and even harder to get noticed through all the noise. Simply being there is no longer enough to brands so see real ROI for their marketing spend. There’s also the competition; SXSW is no longer the only game in town. Brands are starting to look at up and coming conferences as real and viable alternatives like Collision Conference in New Orleans that nestles right before Jazz Fest.

There is a silver lining, though, that this could be an opportunity for SXSW to “correct” itself and regain it’s edge after so much growth -- going back to real music discovery instead of being a platform for mainstream product launches and established bands performing, and making itself attractive to brands and bands as it was before.

Maurice Bernstein is founder and CEO of Giant Step

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