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    Published December 23, 2022.

    Server-side tagging (SST) is a quiet revolution in the digital ecosystem. It’s both a strong alternative to third-party reliance and a success case for privacy.

    As a consequence of the coming end of third-party cookies, a major structural change is happening: millions of businesses need alternatives to the third-part data networks they’ve been dependent on for analytics, marketing and growth.

    In this blog post, find out what server-side tagging is, how it works and why it may be a key tool for future-proofing your company’s data strategy for the consent-centric digital ecosystem on the horizon.

    Server-side tagging vs client-side tagging

    First off, what is server-side tagging?

    Server-side tagging is an alternative system of data tracking that moves control from third parties (like Google, HubSpot)  to first party (you, the website owner/operator) by hosting both a website and its users’ data on a centralized, protected server.

    Through the use of this central server, you decide what data to forward to third parties in a privacy-friendly manner, e.g. anonymizing IP addresses before sharing.

    Today, client-side tagging is the most widespread system in place. With it, third parties have direct access to users on the browser level via the tags and scripts that you implement on your website to enable their services to function, like analytics and marketing services.

    Server-side tagging, on the other hand, works through a central server that hosts all data collected from your users and customers. Instead of third parties having direct access to your website —plus its users and their personal data — a server acts as a centralized, protective buffer between your users and third-party vendors looking to track data.

    While there are benefits to client-side tagging, the industry and digital ecosystem at large is changing, and in this major shift, server-side tagging is emerging as a powerful tool to future-proof your company’s data strategy.

    As with client-side tagging, server-side tagging also has a prerequisite: the explicit collection of consent from the users in order that consented user data to be transferred to other 3rd party providers that a business works with.

    What Are the benefits of server-side tagging?

    The most direct benefits of server-side tagging include:

    • Control of your own and your users’ consented data
    • First-party cookies will still be supported after third-party cookie use is deprecated
    • Achieving and maintaining data privacy compliance becomes easier
    • Improved monetization and data collection through bypassing ad blockers
    • Increased website performance since only one tag needs deployment versus the heavy duty tag systems of today’s client-side paradigm
    • Improved website and data security
    • Comprehensive view of customers across touchpoints
    • Adapt to privacy changes in regulations and technology, e.g. Intelligent Tracking Prevention (ITP)
    • Centralized source of compliance, e.g. for legal audits
    • Integrates with all channels, web and app can communicate through the same endpoint/server, which is an enormous benefit in contrast to the common siloed approach today
    Benefits of server-side tagging

    While server-side tagging does come with increased upfront costs, e.g. the price of a server to host your setup and resources to implement and maintain it, companies who see this as an investment are well positioned for the coming years.

    Marketing departments are on alert across many industries, as the understanding dawns that the death of third-party cookies will result in a huge loss of data. All data-driven companies must make this migration sooner or later. Companies that migrate their marketing and analytics efforts to consent-centric data strategies are proactively grasping these opportunities now.

    If you are already thinking about an alternative to third-party cookies, server-side tagging is emerging as a strong alternative network structure that will not only make compliance easier and much more seamless, but will qualify the data that you collect from your users. 

    First-party data is collected by your own website about its own users and you are not only in control of that data, there is also a potential for you to gain a better understanding of your users, website, apps and business at large. Contrary to third-party data aggregation, first-party is both more secure and makes for better insights for your business.

    Visit Usercentrics to learn more about how to get started with server-side tagging (SST)

    Why is the industry changing to server-side tagging?

    Companies have access to less data today than before the arrival of the EU’s GDPR. This is a fact that’s sinking in across many industries four years after the GDPR forced change on the tracking industry, and many similar data privacy regulations are in line to take effect all over the world.

    Small and medium-sized companies have been dependent on the third-party data network basically since 2012, when Google changed their business strategy to broker data. For the last ten years, businesses grew on the foundation of third-party tracking: implementing a “free” tag on your website would automate a tag management system to collect user data and work it into analytics, performance insights and targeted marketing campaigns.

    This worked through client-side tagging: third-party tags would be set on a user’s browser, allowing third parties direct and unrestricted access to all the data that your website would collect about the user – often without them knowing about it at all.

    That system is ending because its main technological driver — the third-party cookie — is ending. Google’s decision to soon end third-party cookies in Chrome (which retains nearly two-thirds of the browser market) all but makes it certain that the entire way of doing business that rests on the third-party cookie now has an end date (though it keeps moving).

    From a privacy perspective, this is a good thing. 

    Third-party cookies and similar persistent browser-side tracking technologies are a privacy nightmare: they are utilized to follow users across all of their internet activities, building vast profiles on individuals, which can be bought and sold by — or to — pretty much anyone. 

    With client-side tagging, website owners have very little control over tag and script behavior. Third-party tags basically enable third parties to have full and free access to everything that happens on the website, including user’s personal and potentially sensitive data.

    Server-side tagging won’t replace client-side tagging, at least not yet. It’s complementary as the industry shifts towards centering the user and their consent.

    But server-side tagging can make data privacy much easier for companies precisely because it is capable of things that are not possible on a browser-level under the old model. Instead of your website sending user data straight to third parties, it first sends user data to your server endpoint. 

    Here, a lot more data protection can take place, including what services have access to the server and what data will be shared with them, orchestrated more easily by or for your company.

    Consent and server-side tagging

    Consent and server-side tagging

    When it comes to data, it’s not about quantity anymore, but about quality, and the defining difference here is consent

    Digital marketers and online businesses don’t actually need so much data, they need better data.

    A 2021 study by GumGum shows that contextual advertising generated 43% more engagement and 2.2 times better ad recall than targeted/behavioral advertising. The study concludes that contextually relevant ads inspired a statistically significant increase in purchase intent.

    Asking the user whether they want to be tracked, or what kind of data they would be comfortable giving in exchange for better online experiences, is what will make the quality difference in what kind of data your company gets.

    Giving the user agency involves engaging the user in their own online experience, making the ads and analytics more contextual and potentially more valuable to both the user and your business.

    This is where server-side tagging is emerging as a strong alternative and a way to future-proof your organisation’s data strategy. Consent is obtained once and transmitted to the server, where the data is processed in consideration of the consent and forwarded to other third-party providers.

    Future-proofing your data strategy

    Server-side tagging is a way to centralize and simplify data streams flowing from end users in order to both have more control over it and to know it better.

    In the major shift from third-party to first-party data, server-side tagging is one of the most future-oriented solutions available today since it frees your company from dependence on browser tracking mechanisms. 

    Server-side tagging solves a range of today’s issues and challenges facing businesses online, such as browser-level ad blockers and Apple’s Intelligent Tracking Prevention (ITP), which restricts the client-side tagging setup, impacting digital marketers in many companies.

    Serve-side tagging structures your data strategy around technologies that we know will be the dominant ones in a couple of years.

    With the arrival of comprehensive data privacy laws like the EU’s GDPR and California’s CCPA and CPRA, the adtech industry and online businesses have been given a clear incentive to do data tracking in a different way. 

    Client-side tagging and the third-party dominance that it sustained have become crippled, because users would say no to third-party cookies via consent banners, or use ad-blocker browser plugins. As a result, many businesses started to experience data loss.

    Setting up server-side tagging means that you need to think about what you’re doing with your data, e.g. what do you want data for and how do you plan to use it? Working closely with user consent can help you become more aware of the best uses of data, while staying within the limits of the relevant data privacy regulations that apply to your business.

    While some businesses might shy away from this responsibility because they are used to the client-side tagging system, where you just drop a tag and then have automatic analytics, this responsibility already lies with the website owner/operator legally.

    Under the GDPR, website owners and operators are “data controllers” with the final legal responsibility for the data processing taking place on their domains.

    Under the current client-side paradigm, this puts small and medium-size companies at risk, since they don’t actually have full control over what data processing happens on their domains. Third-party vendors have direct access to users via third-party tags and scripts implemented straight into the source code.

    Companies that manage to change their perspective and data strategy away from seeing server-side tagging and the end of the third-party cookies as an obstacle will gain ground in the shifting digital ecosystem. 

    Better understanding of your own data and its value will translate to better analytics and marketing.That’s how we can build a future where stronger data protection enables a thriving digital ecosystem.

    Conclusion

    Server-side tagging is not a miracle,  it’s just another tool. But it’s an important alternative to the client-side tracking systems in today’s digital ecosystems, which leave users with consent fatigue and eroded trust and businesses with data loss and possible legal risks.

    Server-side tagging is a consent-centric, future-oriented solution that does have some initial resource costs, but is ultimately an investment with sustainable ROI. SST will be necessary for any data-driven business to operate in the near future when third-party cookies — and the entire data tracking network that they support — stop working.

    Server-side tagging is a consent-centric, future-oriented solution

    The shift from client-side to server-side tagging reflects a larger shift from mass collection of data to better data, including more control of the data and how it is used, just like online businesses are moving towards contextual ads and away from targeted ones. 

    More control locally means closer relationships with your users and customers, too, which ultimately builds trust and engagement.

    Server-Side Tagging FAQ

    Who is server-side tagging for?

    Server-side tagging is for data-driven companies that will continue to rely on user data for growth in the future. SST is for companies that are big enough to afford a server dedicated to server-side tagging and have the resources for setup and management. Visit Usercentrics to learn more.

    How can I implement server-side tagging?

    If you want to experience the benefits of server-side tagging (like easier compliance, better control of and value for your data and stronger data privacy protection), visit the Usercentrics knowledge hub to find out more and talk to one of our experts.

    Is server-side tagging GDPR-compliant?

    Server-side tagging is just a tool, but can help enable compliance if you ask for consent and inform users about the purposes of data collection before you start tracking the user. Visit Usercentrics to learn more.

    Resources

    How to implement server-side conversion tracking with Google Ads and Usercentrics CMP

    Experience the benefits of Server-side Tagging with Usercentrics

    Bring performance and privacy together with Server-Side Tagging

    How Server-side tracking and consent management creates harmony between privacy and data

    Telium: Choosing Client-side, Server-side or Both For Data Collection and Delivery

    Usercentrics: What is server-side tagging?

    Study by GumGum into benefits of contextual advertising

    Google Tag Manager: an introduction to server-side tagging

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