Toll Road Agencies Stepping Up Promotion

More than five years after the first toll road opened in Orange County, and more than 20 years since backers said such roadways were needed, toll road officials are in a curious position: They have to hire image makers to persuade motorists to use the roads.

Toll road officials, who have poured nearly $3.2 million into marketing over the last two years, approved a short list of firms last week to lead a new multimillion-dollar campaign this fall.

The effort marks a major philosophical shift for the toll road agencies, which had no budget for marketing until the latest fiscal year, which ended June 30, officials said.

Having to sell commuters on taking the toll roads raises eyebrows, particularly among those who oppose the proposed route of Foothill South’s final 16-mile segment: through San Onofre State Beach. If the roads are so necessary, foes ask, why aren’t more people using them?

“I think it’s a telling sign that they have to spend so much on marketing,” said environmentalist Dan Silver of the Endangered Habitats League. “You have to wonder about the financial viability of building more and more of these toll roads, which are very expensive.”

Toll road officials defend the expenditures, saying they make good business sense in a competitive marketplace.

“In the past, people built roads and let people know they were open and made sure they were in the Thomas Bros. guide and they were done,” said toll road spokeswoman Lisa Telles. “But we are marketing a service that is in direct competition with free roads.”

The agencies began playing a bigger role in marketing the roads after traffic fell far short of original projections on the San Joaquin Hills toll road, which opened in late 1996.

Marketing had been left to Lockheed Martin, the supplier of automated toll collection devices. But the two boards of the Transportation Corridor Agencies expect to take control of marketing in June and select a new firm to help them.

Even without direct control, the agencies contributed nearly $1 million for marketing in the last fiscal year and an additional $2.2 million in the current fiscal year. The agencies have a combined annual operating budget this year of $479 million.

Walter Kreutzen, chief executive for the agencies, believes the toll roads need to be viewed more as a retail business than a public service. After all, he said, the roads will become freeways once the bonds are paid off.

So far, 51 miles of toll roads are in use. The remaining Foothill South segment would connect Oso Parkway with Interstate 5.

“We are selling a quality of life and time savings in your life,” Kreutzen said. “We will market these roads as long as we can generate more business doing so.”

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Industry experts and academics say marketing makes good sense, but getting results may not be simple.

“Toll roads are a bit different,” said Peter Samuel, publisher of the Toll Roads Newsletter in Frederick, Md. “With toll roads, you haven’t paid for them already, so you need to generate traffic. You need to say to people: Here’s a road you can use.”

Samuel said marketing can do only so much, boosting traffic on a road by just 2% to 4% each year. At that rate, the toll roads in Orange County would just about break even on their current marketing effort, earning enough revenue through new users to cover the amount spent on advertising this fiscal year.

Even some early supporters of the roads say the need to advertise points to flaws in how the roads were presented to investors and the public.

“Just the very fact that you have to take money out of your pocket . . . makes you think harder about taking the trip,” said G.J. (Pete) Fielding, a UC Irvine professor who studies toll road issues.

“When you put in a toll road, there is a restraint against travel, [and county officials] failed to recognize that.”

Fielding said toll road backers are paying the price now for the unrealistically high traffic projections they used to sell $3.1 billion in bonds and to push construction through a contentious environmental review process.

“I think they built bigger facilities than they needed for demand,” he said. “But they aren’t alone; just about everyone who has built toll roads recently has found their projections were off by as much as 50%.”

How to make up for the shortfall remains unknown. Industry analysts say increasing market share for toll roads is far from being the science it is in more traditional advertising fields.

“With these roads, we don’t know how to reach our market. It crosses all sorts of socioeconomic boundaries,” said Wendy Williams, manager for business development for TransCore, a Harrisburg, Penn., supplier of toll road technologies.

“If you spent $1 more on TV, I can’t tell you if that translates into more users,” she said.

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Orange County Supervisor Todd Spitzer, a member of both toll road agency boards, said he remains unpersuaded that marketing will increase traffic on the roads. Spitzer said when he looked at the impact of two years of marketing on the San Joaquin Hills corridor, he found little difference.

“One thing you might conclude is that it was a waste of time and money to advertise,” Spitzer said. “But on the other hand, maybe the marketing is what kept the numbers at a steady level; maybe we would have lost riders without the marketing.”

Spitzer said he can understand people being puzzled by the need to advertise.

“I think it is an entirely legitimate question to ask why we need to do this if the demand for the roads was big enough to get them built,” he said. “I don’t know the answer.”

Some longtime opponents of the roads, which have cut through environmentally sensitive land in the county, say that having to drum up business now is laughable.

“I guess I’m dumbfounded by it,” said Claire Schlotterbeck, president of the group that helped create Chino Hills State Park.

She scoffed at plans for the Foothill South, which is expected to take care of traffic problems that may exist in 2020.

“They can’t even fill what they already built,” she said.