Daytime panels and nighttime parties form the public-facing portion of SXSW with plenty of money spent on badges and open bars.
Behind the closed doors of restaurants and hotels, there is another monetary ecosystem that keeps companies coming back and spending on events, restaurant buyouts and hotel suites.
See also: Julian Assange at SXSW: All Talk but Nothing to Say
“What we see at [SXSW] is the above water ... then there’s a whole economy and marketplace that isn’t being advertised,” said Joe Ciarallo, a senior director of public relations for Salesforce Marketing Cloud who has attended SXSW interactive five times.
SXSW added $218.2 million to the Austin economy in 2013, according to an economic analysis from the event and Greyhill Advisors. That number does not include money that private marketers spend wooing and entertaining potential or current clients.
“People will say, “Oh ‘X’ company isn’t at [SXSW]. That’s wrong. They are at [SXSW]. They may not have their logo on a sign, but they’re here,” Ciarallo said.
For a company like Pandora Media, laying out money for big events (like the four-day show it's hosting with 35 music acts), gets a bit easier when it is done in conjunction with revenue-generating meetings.
And the atmosphere in Austin helps too. The streaming music service said it hosted a private 25-person dinner with a marketing agency and its clients. Pandora identified a few musical guilty pleasures of those attending as a way to show off its data collection to prospective advertisers. That might not fly at other conferences.
"Business at South by Southwest is done just a little bit differently than at other conferences," said Steven Kritzman, vice president of advertising sales at Pandora. "There’s a very social undertone to everything that went on here."
The sheer size of SXSW has caused veterans of the conference and marketers to question the value of the considerable spending in Austin, leading to some debate of whether the event is “over.”
Those critics may have a point. Last year, the event generated 458 million impressions across broadcast, print and online media. With everyone from Yahoo and Pepsi to Funny or Die and Spotify hosting events, it is an expensive proposition to attract consumer attention.
“It's definitely becoming harder to activate at a festival like SXSW without a big budget or a big idea — there are simply too many brands (official and unofficial) in the mix to bank on getting noticed,” said Lauren Austin, creative director of experiential marketing firm MKG, in an email to Mashable.
Business to consumer (B2C) may be a difficult value proposition for anything but the biggest brands at SXSW, but the business to business (B2B) opportunities dictate why companies like Salesforce, which took over a tavern for two days, and Gigya also attend — and spend some money in the process.
Gigya, a social login company and consumer management company, bought out a small Mexican restaurant just a couple blocks from the convention center. Closed to the public, it served as a space to host clients with a bit of food and Wi-Fi.
“B2C, you’re probably going to get lost,” said Gigya CEO Patrick Salyer. “B2B, everyone relevant is here. So if you can create relevant engagement and learn and have one-to-one conversations, that’s actually where I see big [return on investment].
Salyer said he first came to SXSW by himself and ended up doing enough meetings to warrant an investment from the company. So it did a similar setup in 2013 and booked enough business to more than pay for its expenses.
It now sees SXSW as its premier conference of the year over CES or the Cannes Lions Festival of Creativity.
“We saw such a return. We doubled down this year,” Salyer said.
Stop by Mashable House while you're at SXSW to meet Grumpy Cat and swing from a wrecking ball. It's at 305 E 5th St. in Austin, Texas.
Mashable's Annie Colbert and Nora Grenfell work at the Mashable House, under the watchful eyes of doge.
Swinging from a wrecking ball at the Mashable House.
The Friskies’ S.S. Holy Shrimp Boat carries Grumpy Cat and others across Austin.
Passengers join Grumpy Cat, the "worst mate" of the Friskies’ S.S. Holy Shrimp Boat, as it embarks on its maiden voyage.
Grumpy Cat delivers shrimp-flavored cat food to Friends of Austin Animal Center.
Eric Schmidt, executive chairman of Google, speaks during SXSWi.
Oscar Mayer's Weinermobile helps keep Austin weird.
One way to get around the crowds in Austin.
Actress Rosario Dawson speaks onstage during a panel called 'Star Power: Innovative Ways to Engage Millennials.'
IBM Watson's Cognitive Cooking makes a computer into your personal chef.
Dassault Systemes uses 3D technology to create a dynamic theater stage. The stage will be featured in Mr. and Mrs. Dream, a two-person play opening in Paris, France.
Cubify's 3D printer shows off its chops.
Mashable's Lance Ulanoff gets scanned by Cubify's Sense 3D Scanner.
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