• by Joe Mandese  @mp_joemandese, September 23, 2005

Some years ago, when big media shops began dabbling with optimizers, I asked media guru Erwin Ephron why agencies needed high-powered computers to do what media buyers and planners had always done. His reply: "There are too many options for a human being to process." When I asked him how many options there were, he said, "Let me think about that. I'll get back to you."

Several days later, and after consulting with a mathematician friend of his, Ephron came back with a number that astounded me: "The number of options is 1.125, followed by 12 zeros." For those of you, like me, who aren't mathematically inclined, that number is 1.125 quadrillion.

What's remarkable about that number is that it was based on a relatively small subset of the media universe -- national television networks and syndicated tv shows -- and it was derived nearly a decade ago. The media universe has exploded exponentially since then, both in terms of the number of traditional media options, as well as new digital forms.

In fact, digital technology is having an interesting multiplier effect on traditional media, a conventional analog medium like television. Instead of broadcast, we have multicast. Instead of channels, we have video-on-demand servers. Instead of tv programming schedules, we have our "favorites lists" on tivo hard drives. It's a big shift from the relatively quaint tv universe of the late 1990s, when Ephron did his calculation on the basis of hundreds of national tv outlets. Today, the number of tv channels is meaningless. There are hundreds of analog and digital networks, pay tv, and pay-per-view channels listed on Nielsen's national tv database, but we've moved far beyond the apocryphal 500-channel universe.

"The truth is, we're living in a one-channel universe," says advanced media seer Shelly Palmer. By one-channel, Palmer means the channel "3" or "4" that most tv sets need to be tuned to in order to interface with a digital set-top device, which can deliver a virtually unlimited number of channels. It may seem ironic that Madison Avenue has embraced the notion of "channel planning" at a time when the concept of tv channels has effectively become meaningless, but that may be part of the point. People no longer consume media from designated channels. They create their own channels and pathways of media consumption, drawing from whatever content or platform suits their immediate needs.

I haven't asked Ephron to update his calculation; I suspect the figure is now incalculable. There are too many options, and combinations of options, even for a medium like television. tv is no longer simply tv channels. It is any number of ways consumers can choose to pull television content. It can arrive over the air, via a wire, from outer space, the Web, wi-fi, or even a wireless carrier. Combine that with search, as Google, Yahoo!, and other players are doing, and you have an infinite channel universe.

But perhaps the biggest problem with all this choice is that people are increasingly choosing channels that have little or no opportunities for advertisers. According to investment banker Veronis Suhler Stevenson, we reached one important milestone in 2003, the year when consumers spent more money purchasing media than Madison Avenue spent advertising on it. It was a symbolic shift in media control, but an even bigger shift is looming in the next several years, when consumers begin spending less time with ad-supported media than they spend with the kind they pay for themselves.

These are seismic shifts for the media industry, which has historically been economically dependent on advertising. And as Mark Glaser's story about the New York Times Co.'s soul-searching illustrates, it doesn't appear that anyone has figured it out. At least not yet.