How Much Does Augmented Reality Cost?

Managing Director, Jason Higgins explains the burning question on everyone’s mind when it comes to augmented and virtual reality content creation.

How much will it cost?

It’s the question that hangs in the air in almost every one of our introductory meetings and it takes all of my strength to avoid the ‘ How long is a piece of string?’ analogy.

So, with over 20 years experience as an MD of a digital creative agency, I’m going to be really candid with the answer and explain the complexities of pricing from ‘our side’. It relates to us as a studio but is also, I hope, reflective of the introduction with most creative tech companies.

Having introduced AR (and VR) to clients, opened the ideas bottle and filtered them though the gauze of viability, we start a delicate dance within the sub-text of each conversation.

• Them: Will it be beyond this years budget?
• Us: Is this client next years headache?
• Them: Can we commission this without higher management approval?
• Us: What are the workloads like at the moment?
• Them: How long does it take their team to build our ideas?
• Us: Is the project going to offer exposure, learning or other benefits?
• Them: What are tech salaries like in this industry?
• Us: What are rate expectations like in their industry?

Beyond this, however, there are also some practical and fundamental aspects of any project which are important to establish a final cost – existing content and source material, scope of works, clarity of the final project goals, timescales, 3rd parties involved, decision process, roll-out, distribution, support requirements and so on.

So the question eventually bursts forth … How much will all this cost?

A very fair, open and honest question it is. So much so that I will answer it in 3 ways.

The Spread Method

One way to approach it is that most agencies will have a range and average cost of previous projects which creates the framework of a likely future cost. At Harmony Studios, for example, we are unlikely to be able to do anything meaningful with a new client project for less than £5,000, but some projects run over £100,000. Importantly, our average is in the region of £25,000 to £30,000 for complete start to finish projects and this serves as a very rough guide on the costing scale.

Each agency will have a different imprint and, having shared it, at least reactions can be gauged and the conversation continues. However, this has no context and it’s meaningful only in the broadest of terms – so let’s dig a bit deeper.

The Formula Method

(CHr + E) P = Q

Though we can get more granular if needed, (C) represents the viable hour cost to the business including essentials such as overheads, staff, equipment and Christmas parties. (H) is the number of those hours typically needed for the type of project under discussion and (r) is the risk factor on the guess/estimate. E is the likely project specific expenses incurred in developing the experience.

(P) is the important, flexible figure – how busy are we, how much indirect benefit do we gain, what long term relationship is likely, where are our competitors in this? P is our Profit ratio.

Easy then, all of our pricing problems are now resolved in one simple formula which takes into account of the business aspects of the project.

Except it is as flawed as it is simple. How do we know that the finished project is able to effectively deliver on the objectives and client/market requirements? Ideally, we need to push the formula into a more relevant and personalised area.

The Open Method

Singletons in New York will quickly ask, what is seen elsewhere as, a harshly brutal question when dating. “What do you earn?” To many it seems like a crass and superficial question but it has an elegant simplicity. What do you, and others, place on the value of your time? Does is match my current perception of you?

The answer doesn’t green or red-light the date but it does provide an initial social context for the conversation to evolve into likes, dislikes and other aspects of personality.

Clients often feel that unveiling a budget is somehow preventing best value or weakening the negotiating hand. Agencies don’t want to miss out on projects by being too expensive or awkwardly below the perceptions of the client.The honest and open sharing of such information provides more meaningful discussion and allows agencies to understand expectations, look for added value, evolve a sensible technical solution and reduce the likely risk areas.

The open method doesn’t commit anyone to a single path or remove the chance to look elsewhere. It does, however, allow a plan to be constructed with the highest chance of success within the financial restraints of the project – even if that is adjusted during negotiation.

So the dance will end in a series of exchanges which close the dialogue or smooths the path to more important aspects of a project – creativity, technical ability, skills and resources.

I am comfortably happy to ask, and answer, the direct questions quickly and early but equally respective of the situations where this is not possible. Every situation is different.

Hints and Tips

Whatever your methodology is, and whichever side of the client/agency fence you stand on, there are some tips for making your project more successful and efficient.

1. Competitive Quotes – we would always encourage clients to speak to as many potential suitors for ideas and costs. This strengthens knowledge and confidence in the final choice and ensures genuine best value in addition to cost comparisons.
2. Business Objectives – think about the final outcomes you are looking for in quantitative or qualitative measures.
3. Project Brief – a short, succinct outline of you and your market, the reason for the project and the resources available and needed to make it work.
4. Risk Reduction – lower costs can come from relatively small preparations. Assembling mood boards, existing files, similar campaign comparisons and related assets all ease the potential complexities of a project for an agency.
5. Sell it! – if you are excited by the opportunities and potential of the this project, let the agency understand it – we respond well to enthusiasm and “buy in” to experiences even more.

Finally, every client/agency relationship is different and pricing is only one aspect of the value formula. Finding an AR, or any tech, solution provider is not always easy and time should be taken to get the right fit. You can be as subtle or as “New York” as you wish but either way, avoid big talk, meaningless slogans and excessive cheese wherever possible.