If you are relying on (third-party) cookies as an eCommerce store, leave everything aside and dedicate the next ten minutes to reading this article because everything about your business is about to change.

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Google is going to phase third-party cookies out in 2024, Apple is allowing users to opt out of app tracking, and the average user turning towards privacy-focused browsers like DuckDuckGo, your current user tracking might be faulty even in today’s date.

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Many experts are starting to promote server-side tagging as the need of the hour but there is a dearth of credible literature on the internet when it comes to educating eCommerce business owners.

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In this article, we will discuss what is happening in the analytics and advertising industry and what it means for the eCommerce industry. At the end of this article, you will be able to make the right decision for your online business based on your insights.

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Let’s get started:

Understanding “why” server-side tagging with respect to eCommerce businesses?

Internet users are evolving faster than ever before when it comes to privacy. Earlier, it was limited to ‘concerns’ but multiple large-scale data breaches and suspected invasion of privacy have compelled lawmakers to take active measures.

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Various compliances including GDPR, CCPA, and new bills tabled in the United States Congress reflect the fact that the public sentiments are being echoed by governments. 

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The growing user base of browsers like DuckDuckGo, Brave, and Vivaldi is a strong indicator of the pro-privacy stance of the average internet user. In fact, Apple’s ITP 2.0 and security updates in iOS 14’s App Tracking Transparency Framework (ATTF) could result in up to 25% data loss/discrepancy. 

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These developments are predecessors to the third-party cookie apocalypse which is set to change the discourse of online advertising despite a few delays. Read this article on how the phasing out of third-party cookies is going to affect you to get more clarity on the issue.

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In the second article of our introductory series on the topic, we explained how server-side tagging will help businesses navigate the cookie-less internet. But when it comes to eCommerce, things get even more complicated.

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If you are an online retailer or wholesaler, implementing server-side tagging is more important than any other business type. The average cart abandonment rate currently sits at 69.99% which costs the eCommerce industry roughly $18 billion a year.

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On top of that, cart abandonment emails have a conversion rate of 10% which is by far the most effective channel when it comes to generating ROI. The loss of tracking and analytics due to the above-mentioned developments will further widen the deficit and also render targeted advertising methods (like Google Retargeting Ads) ineffective.

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Now that you understand the seriousness of the situation, let us go through the basics of server-side tagging and then jump to its benefits for eCommerce businesses.

What is server-side tagging?

The current method where third-party cookies are installed on the visitor’s browser is known as client-side tagging but the above-discussed limitations are slowly making it redundant.

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In server-side tagging too, the user data is captured and processed but the method of doing so is modified. Instead of sending data directly to third parties, it is first sent to a server and the server sends this data to third parties like Facebook after necessary cleaning and masking.

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Since the data is sent through your server you have complete control over what data to send to whom. It is enabled through your first-party cookie which means that privacy-focused browsers, ad blockers, and app tracking mechanisms won’t affect data collection.

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Click here to learn more about server-side tagging.

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Server-side tagging isn’t something completely new, in fact, it has been around for years but given the complexity of its implementation. But today, it has become a necessity for sectors like eCommerce that rely on data and need to be quick on their toes to adopt server-side tagging.

Benefits of server-side tagging for eCommerce businesses

In this section, we will go through the top seven benefits of server-side tagging from an eCommerce business perspective:

#1 Enhanced customer data security

Firstly, the customer (user) data is stored on a secure server which is generally owned by large corporations like Google which means that this data is protected by state-of-the-art security measures.

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In this case, the data isn’t stored on the customer’s browser, making it comparatively difficult for malicious actors and unauthorized people to steal important information like payment details, credentials, and other private data.

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This will make a positive impact on customers’ trust in online stores when it comes to sharing personal information. This way, it would be easier to convince your customers to create accounts and run consent-based marketing campaigns through email and other channels.

#2 Improved accuracy and reliability of analytics

Again, removing dependency on the customer’s browser allows you to bypass the possibility of data inconsistency and inaccuracy caused by browser incompatibility, ad-blockers, and device-OS combinations.

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Since all customer data is stored and processed on a centralized server, the data sent to different marketing and advertising platforms is consistent. It also makes data management more efficient and streamlined, thereby adding to the quality of analytics,

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This in turn improves the accuracy and reliability of analytics reports, helping online store owners make the right decisions.

#3 Better scalability

When you transfer the data from the customer's browser to a server, you benefit from the inherent high processing power and resources available at your disposal. 

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Thus, it enables your eCommerce store to handle a high volume of visitors at any given moment as well as capture, store, and process their data efficiently. Also, the quality and accuracy of analytics stay constant, thereby helping online store owners to fulfill high demands spontaneously.

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Having said that, the high scalability of analytics doesn’t negatively impact the security either since the data is stored and processed in enterprise-grade servers, allowing eCommerce businesses to confidently boost their marketing efforts without compromising on their customer’s data security.

#4 Improved page load speed

As a website owner of any sort, you might have come across online advice stating that you must use as few cookies as possible to optimize your website load time.

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This is especially important for eCommerce websites since a significant number of visitors prefer websites to load in under two seconds and most of your traffic wouldn’t visit your site ever again. Combining it with user behavior like window shopping and your competitors trying to grab their attention, one cannot compromise on page load speed.

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Server-side tagging transfers the data storage and processing to the server instead of relying on the user’s hardware and network capabilities which also helps in targeting markets with low band availability.

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In server-side tagging, the amount of code that needs to be loaded on the customer’s browser is significantly less than the conventional third-party cookie approach. 

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The reduced code footprint is coherent with SST’s scalability and it makes server-side tagging supportive of fast page loading speed and user experience.

#5 Get greater control over user data

Client-side tagging has been viewed as one of the most privacy-invasive technologies on the internet and even the website owners aren’t in control of what data a third-party cookie collects or how it utilizes the data.

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With server-side tracking, website owners have greater control over what data to share with a third party and set the rules for utilizing it. For instance, if you don’t want to share a portion of your first-party data with a platform like TikTok, you can do so unlike in the past.

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As an eCommerce store, SST empowers eCommerce website owners to reassure their customers of their privacy and data security which can become a great motivating factor for customers to buy from the online store.

#6 Longer cookie life

Currently, most third-party cookies have a shelf life ranging from 24 hours to seven days, post that, the data is deleted and the user is considered a new visitor even if they are returning visitors. 

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On the other hand, first-party cookies can stay around for up to six months depending on the browser which is highly beneficial for eCommerce websites as they can optimize the cookie’s shelf life in accordance with their sales cycle. 

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Also, the eCommerce store owners won’t face issues with ad attribution and inaccuracy in analytics with the help of server-side tagging-enabled first-party cookies.

#7 [Bonus] Early adoption of server-side tagging can be marketed as a ‘pro-customer’ stance

The phasing out of third-party cookies and implementation of server-side tagging is mandated by legal frameworks across the globe due to the public sentiment but as a business, but as a business owner, you can capitalize on its (necessary) adoption.

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As an eCommerce store, trust is a make or break factor and implementation of server-side tagging can be easily marketed as a pro-customer move. 

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Educating your customers about its benefits and effects as a part of your marketing strategy can help strengthen your brand as well as tap into new audiences since the mass adoption of SST will take considerable time.

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If you need any help with educating your customers about the benefits of server-side tagging with respect to your eCommerce store, feel free to contact Tagmate.

Summing Up: eCommerce industry cannot thrive (or survive) without data

Towards the end of this article, I would like to reiterate that the eCommerce industry is heavily dependent on data and every business owner in this sector must be proactive when it comes to their customer data.

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At Tagmate, we understand the importance of leveraging first-party data for conversion optimization and user experience: two high-impact factors for eCommerce businesses. 

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Try Tagmate to implement server-side tagging on your eCommerce website with a few clicks.

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