From third party to first party: the future of data collection

Companies are increasingly switching from third-party data to first-party data. What are the reasons behind this? And what could a privacy-first data strategy with Google Analytics 4 (GA4) and Server-Side Tagging (SST) look like?

What is Server-Side Tagging?

Server-Side Tagging (or "SST") also known as Server-Side Tracking, means that data is sent from a server to the recipient (vendor) instead of from a user's browser. The principle behind this is as follows:

Classic Tracking:

Classic, also called "client-side" tracking, works via Javascript and counting pixels in the browser. When a user visits a website, the browser downloads a tracking script (e.g. analytics.js for Google's Universal Analytics, gtag.js for GA4) and executes it. The tracking script, in turn, collects various data such as the visited page, clicks, or device information, and sends it to the vendor, in our example Google:

So there is a direct connection between the user and the vendor. This makes it relatively easy to prevent tracking. A request to "http://google-analytics.com" can be easily identified or blocked and this is exactly the mechanism used by so-called ITBs ("Intelligent-Tracking-Preventions"). Examples of well-known ITBs are the privacy settings in the Safari or Firefox browser or browser extensions like Ghostery or the Privacy Badger.

In addition, an IP address is always transmitted when data is transmitted, which makes it difficult from a European perspective to operate tracking without consent.

Server-Side Tagging:

With server-side tagging, a separate tagging server is interposed. Since this server is operated independently, we speak of "First-Party" compared to the "Third-Party" - server of the vendor. All data now flows from the user's browser first only to the tagging server, from where the data is then distributed to one or more vendors:

This brings with it a whole range of advantages, which we will explain in detail further below. However, the most important factor is that the data is now flowing not directly to "http://google-analytics.com", but, for example, to "http://tagging.mywebsite.com". ITBs no longer apply and sensitive data, such as the IP address, can be filtered out on the tagging server, so that some data may be transmitted to the vendors even without consent.

Google Analytics 4 (GA4) & The Google Server Tag Manager

Even when we talk about server-side tagging, the user data must first get from the browser to the tagging server. For this transport, Javascript must be used in the browser, which collects the desired data and transmits it to the Server Tag Manager.

"GA4 is the latest analytics software that market leader Google has to offer."

GA4 brings a whole range of advantages compared to its predecessor, "Universal Analytics" (also called "GA3"). These include an improved data model, which allows for more detailed tracking of complex processes, as well as more features in terms of data protection. Machine learning can be used for future predictions and with the export to BigQuery, every company can now build a free data warehouse.

With Universal Analytics, no data can be collected after July 1, 2023. Companies that have so far relied on Universal Analytics should therefore plan in good time for a migration to GA4. We are happy to assist you and provide you with a free & non-binding migration plan.

Google Analytics 4 is ideally suited for use with a Server-Side Tag Manager. The tool is used to send data from the user's browser to the tagging server, from where it can then be distributed to the vendors. The flexible data model, which is based on events, makes it possible to provide data for all web analytics and online marketing tools with just one request. The GA4 data can be sent from the server tag manager to GA4 as well as to Google Ads, Facebook/Meta, AWIN, AT Internet, Econda, Microsoft/Bing, LinkedIn, or Piwik, for example.

The Google Server Tag Manager

Google's Server Tag Manager is our recommendation for implementing server-side tagging. The reasons are simple:

• The software is free for everyone
• The installation can be done with a few clicks in the Google Cloud or on any other server with Docker
• Due to the technical structure, very little maintenance effort is required
• The high adaptability makes it possible to even comply with strict data protection laws like in DE (e.g. hosting in the EU/DE, encryption, logging policy, etc.)
• Easy integration with Google tools
• Compatible with every vendor/data recipient through "Custom Clients & Tags" (self-programmable endpoints that receive, process, and send data to vendors)

It is important to understand that the Server Tag Manager is by no means an alternative to the classic "Web Tag Manager", the "GTM". The GTM is used to trigger certain tracking tags in certain situations or interactions on a website. The Server Tag Manager, on the other hand, receives the data that the tags, which the Web Tag Manager has triggered, send. The products complement each other.

GA4 and the Google Server Tag Manager work wonderfully together. In principle, however, both of course also function with other open-source or commercial tools as well as self-built tools.

Why is Server-Side Tagging so interesting?

Intelligent-Tracking-Preventions (ITP)

For years, browser manufacturers have been increasingly relying on so-called "ITPs". The acronym stands for "Intelligent Tracking Preventions" and refers to a feature intended to prevent tracking by third-party services like Google Analytics.

In practice, this is usually achieved by blocking certain third-party requests (communication between the browser and, for example, Google's server) via a "blacklist". The domains of known trackers such as "http://google-analytics.com" or "http://connect.facebook.net" are blocked so that no tracking data can be transmitted to them anymore. In some cases, requests are also deliberately manipulated to transmit false or heavily truncated data.

"Apple's Safari browser in particular is setting new standards here with a maximum lifespan of only 24 hours for cookies from known tracking providers. This makes cross-day user tracking impossible."

Another method is the reduction of the "cookie lifetime," or the restriction of the maximum duration in which a cookie can be read again. Here too, Apple's Safari browser is setting new standards with a maximum lifespan of only 24 hours for cookies from known tracking providers, making cross-day user tracking impossible.

These types of tracking preventions are currently being used in Safari, Firefox, and Microsoft Edge and are activated by default. Companies that only rely on client-side tracking will be particularly affected by these restrictions. Depending on the distribution of users on mobile and desktop devices as well as the various operating systems, 60-70% of users can be affected by ITPs.

By interposing their first-party server, these restrictions can be circumvented and it is not foreseeable that ITPs will reliably detect and block First-Party Collection Server in the future.

The Matter of Consent

Ever since the introduction of the GDPR and in Germany of course also the TTDSG, consent is needed to operate most online marketing or web analytics tools, as they both transmit personally identifiable information to third parties and save user identifiers in the form of cookies on the device. To obtain legally compliant consent, Consent Management Solutions (often referred to simply as "cookie banners") are mostly used. The problem: A data protection-compliant cookie banner, even with a high degree of optimizations, often only has a consent rate of ~70%, meaning that 30% of users generally cannot be captured by the marketing or analytics tools. Matching this, the trend is strongly declining. Some companies have seen a drop in the consent rate by more than 10 percentage points over the past 12 months. The reason for this is the presumably increased interest in data protection among users.

"The Problem: A data protection-compliant cookie banner - even with an advanced degree of optimization - often only has a consent rate of ~70%, meaning that 30% of users generally cannot be captured by the marketing or analytics tools."

However, not every type of web tracking necessarily requires consent. For capturing important metrics of a website such as visitor counts, frequently visited pages, entry and exit points, or bounce rate, consent is often not necessary. The same applies to key KPIs in e-commerce such as revenue, transaction volume, exit step in the checkout process, etc. These pieces of information are not inherently personally identifiable, the problem is that with tools like Google Analytics in pure client-side operation, personal data is always transmitted when trying to capture the data mentioned above. Specifically, the IP address must necessarily be transmitted to the tracking provider in pure client-side tagging.

With server-side tagging, on the other hand, there is only a connection from the user to the first-party tagging server. The server then decides which data can be transmitted without consent to third parties such as Google Analytics. This allows the most important data to be processed without consent, significantly increasing the total amount of information in the web analytics tools.

Improving Core Web Vitals

What do Google, Facebook, Twitter, AWIN, AT Internet, Criteo, and many other analytics and online marketing tools have in common? They all collect and process the same data. With client-side tagging, each of the providers brings its own Javascript to the website. This means that a multiple of identical code is executed in the user's browser. This is not only very detrimental to the noticeable performance of the website, but above all leads to a worse core web vital or page speed score. Tools like Lighthouse, GTMetrix, or other scanners detect the large amount of Javascript and penalize the website. But a poor score not only results in a bad feeling among site operators: Search engines like Google use such scores to adjust the SEO ranking of a website. Sluggish and poorly optimized websites are gradually disappearing from the top Google results, and the search engine operator has already announced that core web vitals will have an even greater impact on SEO ranking in the future.

Server-side tagging can simply help with this problem: The transmission of user data only takes place once: Browser to tagging server. From there, the same set of data can be expanded, reduced, formatted, or otherwise adjusted and then sent to a multitude of third-party providers. The website feels faster, SEO scores go back up, and at the same time, you benefit from a comparable data mix between the different vendors. And if you take a look at the individual web analytics or online marketing providers in detail, you will also find that the technology providers now recommend server-side tagging as the preferred implementation variant of their tags.

Conclusion: The Benefits of Server-Side Tagging - can I benefit from the Technology?

In general, it can be said that every company that works with data from web analytics or online marketing tools benefits from Server-Side Tagging. The more important the data for your business strategy, the higher the impact will be from the introduction of a Server Tag Manager. The most important advantages are:

• Adjustment to Intelligent Tracking Preventions (ITPs)
• Bypassing of ad blockers and privacy extensions
• Capturing key KPIs even without consent and also in tools such as Google Analytics
• Improvement of data quality
• Improvement of website performance through increasing Core Web Vital scores, due to less Javascript that needs to be executed in the browser
• Better comparability between third-party tools by consolidating the database

We can only advise every company to try out the technology. Even though the initial setup is not always straightforward, the introduction of Server-Side Tagging almost always pays off. Our clients can increase their data volume by an average of 60-70%, with some individual cases even experiencing improvements of up to 95%.

"Our clients can increase their data volume by an average of 60-70%, with some individual cases even experiencing improvements of up to 95%."

Do not hesitate to arrange a non-binding initial consultation with us. We will check your current web analytics and online marketing configuration free of charge and provide you with an individual implementation plan for a server tag manager.

And what about the Costs?

Finally, the potential costs of implementing Server-Side Tagging should not go unmentioned. For the setup described in this article (GA4 + Google Server Tag Manager), the cost overview is fairly straightforward:

• GA4 is completely free as a web analytics and transport tool. A 360 - subscription is not necessary
• Also, the Google Server Tag Manager (as the only professional solution!) can be used free of charge
• Only costs for providing your server are incurred. These are of course variable and heavily dependent on website traffic, geo scaling, and other factors. Operating the tagging server in the Google Cloud usually incurs costs between $10 and $100 per month. Google talks about a benchmark of $150 per month for a website with 50 requests per second - but most websites are likely significantly below this. If the tagging server is not operated in the Google Cloud, but in its on-premise infrastructure, these costs can be significantly reduced again