HomeClub Enlists New Ad Agency : Davis, Ball & Colombatto the Victor in Stiff Competition

One of the most sought-after pieces of business in the Los Angeles advertising market--the $15-million HomeClub account--has been won by a Los Angeles ad agency, the companies said Tuesday.

Davis, Ball & Colombatto, the firm that created the popular “Mac Tonight” ad campaign for McDonald’s, emerged the winner after a harrowing review that at one time included more than 50 Los Angeles ad agencies vying for the business.

By early spring, TV viewers will no longer hear HomeClub’s familiar ad slogan, “Save on everything every day,” said Sean Lee, president and chief executive of the Fullerton-based HomeClub. Instead, the nation’s second-largest home improvement chain said it now plans to do battle with No. 1 Home Depot by talking less about low prices and more about variety.

“We think that campaign was too one dimensional,” Lee said. “There’s more to life than prices.”

But Lee reluctantly conceded that HomeClub’s current hard-hitting ad campaign that compares its low prices to that of rival Home Depot has been extremely successful. Indeed, that campaign was so successful that Home Depot recently reacted by luring away the Los Angeles agency that created it, Admarketing.

Meanwhile, HomeClub’s new agency also said that ads about low prices are becoming old hat. “Advertising low prices is not unique to this category,” said Brad Ball, president of Davis, Ball & Colombatto, which now plans to hire six employees to handle the new business. “We’re going to break out of the pack and attack.”

Can Scare Customers

Analysts who follow the big home improvement chain agree that ads bragging about lower prices are beginning to sound like broken records. “These stores have all identified themselves as having low prices,” said Bo Cheadle, general partner at the San Francisco-based investment firm Montgomery Securities. “People need to hear some reason other than price to go there.”

After all, the massive size of the stores--and the large crowds that shop there--can often scare many potential customers away. “The guy who just wants a hammer and nails to fix a broken fence sure isn’t going to walk in to one of these,” Cheadle said.

Now, to help coax that customer into HomeClub, Lee said, his company is eyeing an ad campaign that will instead focus on the convenience of getting everything at one store--and the wide assortment of goods.

But the real catalyst behind HomeClub’s move was some recent actions by its chief rival, Home Depot, and HomeClub’s former Los Angeles advertising agency, Admarketing.

Two months ago, Admarketing quit the $15-million HomeClub ad business to take on the $25-million account of Home Depot, the Atlanta chain that is the undisputed industry leader. The move not only forced HomeClub to seek out a new ad firm, but also to rethink its marketing strategy. At the same time, HomeClub filed suit to try to block Admarketing from creating ads for Home Depot for one year. That suit has yet to be resolved.

Boom in Southland

Meanwhile, business continues to boom for retailers that service the nation’s estimated $90-billion home improvement sector. And giants such as Home Depot and HomeClub are all vying for a bigger piece of it. After all, the major chains still account for less than 15% of all home improvement sales--most of which are handled by hardware stores and small suppliers at strip centers.

The home improvement business is growing especially fast in Southern California, where the escalating real estate market has persuaded many homeowners to fix up their own homes instead of moving. Indeed, industry experts say that Southern California homeowners spent an estimated $10 billion on home improvements last year.

With 17 stores in Southern California and five more planned here over the next year, HomeClub says it plans to bolster its local advertising. And while its new ad agency certainly doesn’t want to lay a brick with its first ad campaign--it might have to.

After all, bricks are HomeClub’s best-selling item--with sales of some 13 million bricks annually. “Don’t be surprised,” joked ad man Ball, “if that doesn’t end up in the theme line.”