• by May 22, 2020

The New York Times this week said it will stop using a popular but much-maligned technology for ad targeting. It's a necessary step that every publisher, even the smallest local newspaper, needs to adopt to deliver value to advertisers.

Next year, the NYT will phase out third-party cookies, the small data files in web browsers that help to track an internet user's visits among different websites. Instead, the newspaper will use the data collected directly from readers to track their visits to its digital properties and show them ads.

Starting in July, the NYT will offer advertisers 45 audience segments based on demographic data and personal interest. It plans to expand those interest categories by another 30 in the second half of the year. Axios first reported on the newspaper's plans.

The move comes amid growing concerns about privacy among consumers, as well as stricter laws on data sharing. While the United States doesn't have a federal privacy law, states are developing their regulations to give people more control over how their personal data is used.

Tech companies like Apple and Mozilla have restricted the use of tracking cookies in their web browsers. Google this year announced plans to curtail its use in its Chrome browser in the next couple of years.

While publishers have fretted that Google's decision will make it more powerful, they also have an opportunity to collect their own proprietary data about readers for audience segmentation and targeting, much as the NYT is doing.

The data collection strategy will depend on how publishers intend to monetize their audiences. If they're selling inventory through programmatic exchanges that connect with nationwide brands, demographic data have more value for targeting.

For local newspapers that serve small and medium-size businesses, more basic info like ZIP codes may be the most meaningful. Enthusiast titles have a self-selecting audience by interest, and may not feel much of a need to collect information that doesn't indicate purchase intent.

Whatever the strategy, publishers need to prepare for the end of third-party cookies and growing consumer demand for privacy.