Server-side tagging and tracking
First-party tracking
With all the changes happening to website tracking landscape. With cookie banners and browser privacy-oriented features impacting tracking accuracy the advertising platforms are coming up with solutions to prevent the data degradation.
One of the key technical solution is to limit tracking that goes directly to 3rd party APIs and platforms, but instead of proxied through a 1st party system. In the most basic option it means that tracking is carried out by the same server which serves the main website.
That way browser interprets this traffic as internal or 1st party and may not apply all limitations that would kick in if data was sent directly to Google or Meta servers.
Conversions API
To enable 1st party tracking advertising platforms started to publish and enabled Conversions APIs. These are data collection endpoints that can accept events sent by servers and not by pixels as with the traditional tracking.
It is a little simplification but CAPI is a server-side equivalent of the tracking pixel. It's designed to collect the same events, but with more control over data.
Server-side tagging
Introducing a dedicated first-party tracking system brings more benefits. For instance using Google Tag Manager server container allows moving most tagging logic to the backend, which means the website part is trimmed down to core essentials and the server container does the heavy lifting and sending it out to destination services.
For instance when user add a product to the cart the web pixel sends one event to server-side container which applies data transformation and sends that one event multiple times to multiple destination services. If many tags are run on a single event in traditional web tracking setup user navigating away could interrupt some of them completing their work and impacting tracking coverage.
As a result server-side setups are more lightweight for the end-user and more reliable from data collection standpoint.
Server-side tracking (not tagging)
To a non-technical person, first-party tracking, server-side tagging, and server-side tracking can all sound like the same thing, there are some differences between each:
first-party tracking - means the browser events are sent to a first-party system before being forwarded to third-party API. Can happen via server-side tagging but not necessarily and it can be handled directly by eCommerce platform.
server-side tagging - means using actual server-side tag manager which allows offloading tags from the browsers and keeping tagging logic on the backend
server-side tracking - is the most advanced and complicated from this list. It allows tracking events outside of the context of user's browser session. Think about order refund or leads that are converted on a sales call. These are events that are triggered by something else that user's online actions. On hand it enables very advanced tracking scenarios like handling postponed payments, but at then same time creates challenges in linking those events with user's website activites.