SXSW 2011: Going corporate, selling out?

March 16, 2011, 4:15 PM UTC

By Elisabeth Long, contributor

A happy shopper at Apple's SXSW popup iPad 2 store in Austin

Now in its 15th year, the South by Southwest Interactive conference has taken off like the handle of the ubiquitous hockey-stick growth model that startups at the conference aspire to. The 2011 conference saw a spike in attendance – up about 40% over last year’s interactive festival – and an increase in the presence of large corporate sponsors.

According to Hugh Forrest, director of SXSW Interactive, there was some growth in marketing by large corporations in 2010, but a significant increase in 2011, with corporate giants Microsoft (MSFT), Samsung and AT&T (T) sponsoring the interactive conference.

“I hope its’ a reflection of the overall quality of the event and the quality of the experience,” says Forrest, who has been director of the interactive conference since it launched in 1994. “It’s definitely grown a lot, but the bottom line is a quality experience, whether it’s 5 people or 500 or 500,000.”

When the interactive portion of SXSW started in 1994, it was “a group of cutting edge visual creatives,” says Forrest. Forrest acknowledged that the presence of big companies “changes the dynamic a little,” but says corporations recognizing the value of the ideas and innovations coming out of SXSW Interactive is a good thing, and that the conference is “still a very creative community.”

The conference had around 19,000 official attendees this year, shuttling back and forth between 10 hotels and conference centers around town for panels, meet ups and workshops. In addition to panels ranging in topic from ‘Avatar Secrets to Real Life & Love’ to ‘Mobile Optimization with HTML5, CSS3, and JavaScript,’ this year’s festival offered participants plenty of branded diversions.

When attendees tired of learning about the limitless possibilities of social media, they could attend parties sponsored by AMD (AMD) and Google (GOOG), hang out in AT&T’s lounge, or stand in line for hours to buy a hot off the presses iPad 2 at the pop-up store Apple (AAPL) set up in downtown Austin.  To get around town, conference-goers could hop into one of General Motors’ (GM) Chevys tooling around town, offering free rides in exchange for tweets about the ride.

“There are more messages coming through more devices to more people than at any point in history,” says John McGrath, Senior Vice President of Communications for GSD&M, a local advertising agency who partnered with Google for a party at their headquarters. “Attention is much more expensive,” so it makes sense to him that big brands are jumping at the opportunity to be a part of SXSW, which he calls a “huge cultural conversation.”

This year also saw the first mainstream product launch in the conference’s history –Microsoft’s Internet Explorer 9. Microsoft knew SXSW might not be an easy room for the company to play: Ryan Gavin, Senior Director of Internet Explorer, recalls looking around the room during a product launch meeting and realizing everyone was thinking the same thing – “Can we really show up at SXSW?”  But the company felt past launches had landed with a thud, and they needed a game changing release: hence, SXSW. Gavin says they learned “how to speak ‘southby’” (that’s the in-the-know way to refer to the conference) by shutting up and listening to the early adopters they were hoping to reach. Gavin says the launch was a success and he “can’t imagine [Microsoft] not coming back in a big way again.”

Josh Williams, CEO and Co-Founder of Gowalla, a social travel guide that launched at the conference in 2009, has been going to SXSW Interactive since 2002, when it was 800 people in one ballroom.  He’s agnostic on the presence of big brands in Austin, but he does think they change the conference’s tone.

“The meaningful conversations that you used to have in the conference center get pushed to the side,” Williams says. When Gowalla launched at the conference in 2009, “you could still launch a new product here, you knew people who could help you rise above the noise.” But Williams thinks those days are over – there may be marketing opportunities for small companies, but the conference is too saturated for successful product launches by small startups.

Lee Hnetinka might disagree, as he was at SXSW for the first time, showing off a location awareness engine called Leetto. He says the best part about the conference is “interacting and showing your product to the power users.” There’s a difference, he says, between companies that have an innovative product and companies that are just throwing big parties.

John McGrath from GSD&M thinks that there are still opportunities at SXSW Interactive for small brands to get in front of the core group of users that could drive their business, even if that’s only 15 people.  “The big guys can come in and throw around a lot of money, but sometimes that’s a substitute for smart thinking,” he says. The question is whether attendees will notice, or care about, the difference.

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