Ad Agency Jilts HomeClub to Work for Rival

For more than a year, the Los Angeles agency Admarketing has been telling consumers that HomeClub is the lowest priced home improvement chain. Well, the ad firm is about to change its story--it dropped HomeClub on Tuesday and picked up the ad business of the company’s much larger archrival, Home Depot.

Although ad budgets for the two firms were not immediately available late Tuesday, Fullerton-based HomeClub is believed to spend about $15 million annually in advertising, while Atlanta-based Home Depot is believed to spend upward of $25 million. Home Depot is generally regarded as the fastest-growing chain in the nation’s burgeoning home improvement industry.

“If you’re handling a small car maker and General Motors comes along, it’s hard to say no,” said Jack Roth, president of Admarketing, to explain his ad agency’s unusual move.

The agency switch also signals the heated competition that has resulted from the nation’s current home improvement boom. Home Depot posts annual sales of more than $2 billion while HomeClub, owned by Zayre Corp. of Framingham, Mass., posts annual sales of more than $750 million.

Roth--whose agency resigned the Standard Brands Paint business to take on HomeClub--said Admarketing would continue to create ads for HomeClub for 60 days before taking on the Home Depot business.

“This was a difficult decision for us,” said Roth, “but it’s tough to turn down an invitation from the industry leader.” Much of Home Depot’s advertising had previously been handled by M. Finkel & Associates, a tiny Atlanta ad firm that will continue to handle a very small portion of it.

The current HomeClub ad campaign--”At the HomeClub you save on everything every day”--has hit Home Depot where it hurts most--hammering hard on price. The comparison ads repeatedly show examples of HomeClub prices that the chain claims are lower than Home Depot’s.