Metaverse and NFT hype lure marketers back to SXSW

The mood heading into SXSW is certainly different than two years ago, when the Austin-based tech and music festival was in free-fall amid the start of COVID-19 lockdowns. Ad executives appear eager to dust off their boots and kick up their heels for the gathering, set for March 11-20. But even as there is momentum for in-person festivities, the virtual interactions that defined pandemic life also altered the future of SXSW, permanently. 

Perhaps a true sign of the times is Dolly Parton's presence at SXSW ... in the metaverse. Parton will perform live in Austin, but the show will also “stream on the blockchain.” SXSW’s first Web3 sponsor signed up this year, Blockchain Creative Labs, a new division of Fox, which will be working with Parton on NFTs and performing in the metaverse.

The metaverse, and all of its components, will be a hot topic of conversation in Austin. NFTs, for one, are expected to be a main attraction, Web3 startups plan to attend and there are multiple meetups forming around the new technology, said Hugh Forrest, SXSW's chief programming officer. 

Attendees will likely look for new breakthrough apps and platforms, as they do every year. “This will be the first year where NFTs have been such a big part of the event,” Forrest said. “I am curious to see how much traction they gain this year.”

The hype around Web3 is one of several catalysts that helped SXSW regain the energy it lost amid the pandemic, with Forrest noting that, "it was one of our healthiest Februarys ever in terms of badge sales." 

Twitter, which has not been at SXSW since 2019, is going back to Austin to set up a house. Meanwhile, iHeartMedia is opening iHeartPodcasts Hotel in the famed Hotel Saint Cecilia, and Amazon Prime Video is bringing Lizzo.

After CES experienced a mass exodus of attendees in January in the wake of the Omicron surge, there seems to be even more anticipation for live events to go on as planned. 

Organizers have been optimistic because it seems that as the rate of COVID-19 falls across the country, and more restrictions are eased daily, people are starting to come out. SXSW also is now under new management from Penske Media, which bought a 50% stake in the festival last year.

In 2019, attendance at SXSW was 400,000-plus people. Attendance is not expected to hit those levels this year, since international attendees typically make up about 25% and that could be down, Forrest said.

‘Less people,’ more issues

Many attendees anticipated a more intimate Austin. Astrsk, the public relations firm that is known for setting up cocktail hours at industry confabs, sent an invite for a “SXS-less” party on March 13. “Less people, less tacos, less cheap beer,” the invite said.

There is hope that a potentially smaller SXSW could restore some of the event's charm from its early days, when it was a breeding ground for innovation like Twitter, location check-ins and livestreaming.

“This year, we’re a little scaled back, which is cool and something we’re looking forward to,” said Alan Miller, founder of Collide Media, which has worked with Dr. Martens, Netflix and Fender to host SXSW activations. “SXSW has always been about intimate experiences.”

This year, brands still have a lot to consider, even with COVID-19 concerns waning. The war in Ukraine will be top of mind, and one group, Check My Ads, which serves as an industry watchdog to the ad tech space, intends to show up in Austin to discuss the efforts to demonetize Russian disinformation through the ad tech ecosystem.

Locally, Texas is the center of protests regarding the state's new anti-abortion law, as well as a wave of bills that threaten LGBTQ+ rights. Clubhouse, the audio streaming startup, posted to Twitter that it would not send staff to SXSW as a show of support for LGBTQ+ communities. 

There also are civil rights groups concerned that voting restrictions in Texas could marginalize minority communities.

SXSW organizers have been concerned about the political struggles, but Austin has always been considered a radical bastion in an otherwise conservative state. The festival addressed the anti-abortion legislation in September, following some calls for a boycott of the state. “We hear the calls for us to leave the state that we have called home for more than 30 years,” SXSW officials said. “These grievous bills do not reflect the diversity of Texan voters or the evolving demographic and electoral trends. And they certainly do not reflect the progressive views held by many in Austin.”

The festival has an array of panels that will address women’s rights, diversity and inclusion, civil rights, voting and Europe. The European Union has a presence planned on Fourth Street in downtown Austin.

100% that festival

But much will feel the same in Austin, too. Amazon Prime Video will erect a house along Rainey Street to promote content. Amazon Prime will use its venue to host a Lizzo-themed juice bar along with an activation for its original series "The Boys." 

WarnerMedia, a sponsor at SXSW, will take over the Riley Building on Lavaca Street. It’s the “first large-scale event presence and brand activation in 2022,” the company said in an e-mail.

C4, the energy drink company that is based in Austin, took a sponsorship in SXSW for the first time this year, and plans to be all over Sixth Street.

iHeartMedia CMO Gayle Toberman said that SXSW will be the company’s first industry event this year, after hosting some consumer-facing concerts last year. But iHeart was sidelined after Omicron hit in January. “Everyone is craving a chance to collaborate,” Toberman said.

iHeartMedia will be talking about streaming audio, podcasts and advertising at Hotel Saint Cecilia. It’s bringing podcasters along, including Flame Monroe of “Learn and Laugh,” and the producers of the popular horror podcast, “Lore.” 

Toberman said that iHeart expects to convene with ad agency execs from Publicis, Dentsu and DMX Marketing, and they will discuss topics like 3D audio effects in ads and branded podcasts.

Toberman also said, “we’re talking about how brands want to participate in iHeart experiences in the metaverse."

The metaverse is based on virtual and augmented reality experiences that make the internet more interactive. Neal Stephenson, writer of the sci-fi novel “Snow Crash,” who is considered to have coined the term, is speaking at SXSW. NFT artist Beeple will also take the stage. 

Besides the metaverse, Web3, in general, is a central theme. Amid the pandemic, Austin has built a reputation as a haven for displaced high-tech workers, a cohort of people with a penchant for crypto-currency and NFTs. That sounds like “the typical profile of someone who goes to Austin,” said Jamie Gutfreund, global CMO at Whalar, an influencer marketing agency. There are going to be a lot of new people, including a “groundswell of creators,” she said. 

One person who doesn’t fit that profile, but will be in the metaverse all the same, is Dolly Parton. The beloved country singer issued an invite this week for fans to meet her on the blockchain, which is the technology that forms the foundation of cryptocurrency and NFT trading. Blockchain Creative Labs has been helping produce new types of content and communities for Fox, through the blockchain, which can be used to license and distribute music and shows.

Parton is also opening Dollyverse online. SXSW will continue to run a virtual reality version of Austin, which is accessible online. As Parton might have sung in an alternative version of "Big Dreams and Faded Dreams": Put on your digital jeans, your virtual shirt, pull down your VR goggles and hit the metaverse ... Don't know quite what to expect.

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