When to pay for an advertising campaign

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(FORTUNE Small Business) -- Dear FSB: I'm looking at marketing my Internet business, and at least three ad agencies called to say they'd provide services to attract customers to my new online e-store and Web site. They're asking me to pay between $2,000 and $3,000 to have a first conversation. Is this normal operating procedure for an ad agency? Also, would love suggestions on how to get traffic to my e-store. And do I need a business license for my online store?

- Andy Johnson, Brockton, Mass.

Dear Andy: Most agencies that want your business won't be charging you for a meet-and-greet, or for answers to basic questions that might help you decide whether they are a good fit for your business.

Some companies might even perform a complimentary initial analysis of your online marketing and advertising situation, says Chris Pape of Boston, Mass.-based advertising and marketing firm Genuine Interactive.

Others might work on spec, especially if they feel their involvement in your business will pay off in the long run, says Abby Zeitlan of Canton, Mass.-based Triad Advertising.

Paying for development work
Zeitlan says larger advertising firms are likely to charge a fee to develop an initial plan for you; because no two strategies are alike, any first plan takes time and effort to gather and analyze information and prepare a sound strategy. You get what you pay for - but beware of agencies that suggest a thorough brand strategy without analyzing your potential customer base, your industry, and market competitors, Pape says.

"It's like if Nike went door-to-door selling just one shoe of the same style and size," Pape says. "You may find a match once in awhile, but most of the time it's not going to fit."

Either way, you shouldn't pay any ad agency for any work until you feel that firm is the right fit, says Zeitlan.

And remember, chemistry matters, Pape says. Consider whether you "click" with the people you're considering hiring. Are they making an effort to understand your brand, and do they have the creative, technical and strategic horsepower to execute a complete strategy?

As for drawing business to your Web site, that's what you pay an advertising agency to figure out, but our experts reiterate that you'll need a tailored online advertising and marketing campaign.

Online ads can be placed carefully to reach your target audience, says Zeitlan. A good agency can help you analyze behavioral patterns and the demographics of your potential customer base, then develop the right ads and placement campaign, but probably they won't recommend just doing ads. For example, registering for pay-per-click advertising with the major search engines can also be effective, says Pape.

Regarding your last question, in general, Internet sales and web stores are not regulated by any particular agency, so a license is not needed.