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Case Study – SXSW

South by Southwest (SXSW) is an annual music, film, and technology festival held in Austin, Texas. For 10 days in March, the city welcomes thousands of concertgoers, film buffs, and industry insiders. Part trade show and part mega-concert, this enormous event not only makes fans of hip art happy; it also serves as a meeting point for new artists and potential managers, collaborators, and industry executives.

The music portion of the most recent SXSW featured more than 2,000 acts playing for tens of thousands of roving guests. With so many people in attendance, the event presents ample opportunity for promotions of all types. Each year the festival teams up with corporate sponsors like Doritos, AT&T, and Chevrolet to advertise at the event. These business-to-business (B2B) relationships benefit both parties by giving SXSW crucial operating income while providing the companies with a presence at a cool event.

SXSW also features several business-to-consumer (B2C) promotions. For a lower price, attendees can choose to access just a single event, like the film festival. But buying a higher-priced badge not only gets the attendees into all events, but grants them access to VIP keynote speakers, parties, and workshops. These types of deals represent the lifeblood of the event and the main source of the festival’s income.

With so much to do and see, SXSW naturally generates a lot of publicity. Radio stations and magazines run dozens of stories in the run-up to the festival because they consider the event to be news. Each of those stories ends up becoming free publicity for SXSW, giving organizers an incentive to create as much buzz as possible. To accomplish this goal, a public relations team hired by the festival actively seeks publicity from interested stakeholders. This includes the city of Austin itself, which is more than happy to let SXSW fly banners over the streets. As the largest revenue-generating event in Austin, the city’s cooperation with the festival makes a lot of sense.

Music is a product that benefits from a personal touch, so many bands that attend SXSW rely on “street teams” to get the word out. These dedicated fans work for free to promote the band and, by proxy, the event. The fans are more than happy to hand out fliers or talk about the event at local record stores and coffee shops in order to make people aware of their favorite performers. All of this personal selling benefits not only the bands, but the event as well. After all, these street teams consist of thousands of people volunteering to talk about the festival. You can’t buy promotion like that.

That kind of grass-roots publicity is some of the most effective and least expensive available. Every time a music fan tweets about the event, mentions it in a YouTube video or podcast, or blogs about the great time he or she had at the last SXSW, that positive message spreads to several new people. And in today’s social media–driven world, a dependable word-of-mouth recommendation might be the most important type of promotion. Still, it’s impossible to completely control the things that people say about you or your company. That’s why SXSW employs a number of different promotional strategies in its quest to stay cool.

Discussion questions

  1. What is the promotion mix and how is it employed by SXSW?

  2. What are the critical differences between publicity and advertising?

  3. On which of the four elements of the promotion mix does SXSW rely most? Explain your answer.

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