Online Grocers Choose Shops; Budgets Bloom

The online grocery delivery category is heating up, as two of the larger players last week awarded their ad accounts to agencies known for brand building.
Webvan Group has boosted its ad budget almost tenfold and selected Publicis & Hal Riney, San Francisco, to handle the account. The company is rolling out its services nationwide, and sources said it may spend $150-200 million on marketing. Riney is expected to produce a national radio, TV and print campaign. Client and agency officials confirmed the win, but declined to comment further.
The Foster City, Calif., company is in the SEC-mandated quiet period ahead of its upcoming IPO. Previously, Webvan used Gardner, Geary, Coll & Young, San Francisco, to launch in the Bay Area, its first market. The company put its account in review two months ago, and the incumbent resigned.
Separately, HomeGrocer.com, Kirkland, Wash., hired Wieden & Kennedy to handle its $10 million account. Billings are projected to grow to more than $100 million as the client expands nationwide. The Portland, Ore.-based agency, which has been expanding its e-business client roster (AltaVista, Stamps.com, eVineyards.com) in recent months, will develop a major branding campaign with TV, radio, print and outdoor ads, according to agency executives.
“[HomeGrocer.com is] providing a service that harkens back to the days of the milkman,” said Bill Davenport, managing director of the agency’s Portland office. “It’s a convenience and quality thing.”
Wieden’s first ads are slated to break in November in key California markets and in Washington and Oregon. The client plans to expand to more than 20 markets over the next year. Busy mothers are the primary target, Davenport said, adding there is plenty of room for online and bricks-and-mortar grocers to coexist.
Susan Hoffman, newly returned from Wieden’s London office, will spearhead the creative team. Sandy Chen heads the account side.