Pixel-Based vs Server-to-Server Tracking: Preparing for a Cookieless Future

Highlights

• Google is phasing out third-party cookies by early 2025, prompting a shift towards a cookieless future and the adoption of server-to-server tracking.
• First-party cookies are created by the website you visit and are essential for user experience, such as remembering login information. Third-party cookies are set by other domains such as Meta or Google for tracking and advertising purposes across different websites, but face increasing privacy restrictions.
• S2S tracking captures user behavior data directly between advertiser and publisher servers without browser cookies, but requires technical setup, may be less accurate and delayed, and can be blocked by privacy tools.
• Increasing privacy concerns and regulations make pixel-based tracking (cookies) less reliable, driving a shift to S2S tracking for more accurate and compliant data collection.
• Advertisers must adapt to S2S tracking to navigate the cookieless future and maintain effective, privacy-compliant marketing practices.

The Shift Towards a Cookieless Future

As the digital landscape evolves and privacy protections continue to be implemented, advertisers are facing a significant shift: the move towards a cookieless world. With Google planning to phase out third-party cookies on Chrome by early 2025, the primary tracking strategy since the early days of the internet is becoming obsolete. While Apple has already imposed restrictions on Safari, the delay from Chrome gives advertisers a window to adapt.

One emerging, partial solution is server-to-server (S2S) event tracking, which promises to navigate these privacy changes more effectively. S2S is widely used in the app install space but is still early in adoption for web tracking. In this article, we'll explore how cookie-based tracking works, including the differences between first-party and third-party cookies, how S2S tracking works, and the challenges of both.

How Does Cookie-Based Tracking Work?

Cookie-based tracking is a common method used by advertisers to understand user behavior on websites. What’s unique about cookie-based tracking is that the information about a user’s behavior is stored on their browser. Similarly, if you’re signed in to your Google account on Chrome, this information is shared across browsers where you’re signed in (note, this can include cross-device as well).

When you visit a website and perform actions like signing-in, clicking a link, or adding an item to your cart, these actions are recorded in the browser's storage.

When you visit the same or another website, the information recorded can be accessed to provide insights into your browsing habits and preferences. This allows advertisers to tailor their content and ads based on your behavior across different sites (aka retargeting).

Now that we understand how cookies work, let’s talk about the difference between first-party cookies and third-party cookies, as this is the critical part of the changes that are coming.

First-party cookies

First-party cookies are created and stored directly by the website you are visiting (e.g. if you’re on the website Backcountry.com, Backcountry creates the first-party cookies). These cookies are essential for providing a seamless user experience. For instance, they remember your login information so you don’t have to enter it each time you visit, keep track of items in your shopping cart, and retain your preferences on the site. First-party cookies are controlled by the website itself, ensuring that your interactions are remembered and personalized whenever you return.

Third-party cookies

In contrast, third-party cookies are set by domains other than the one the user is visiting. While the initial implementation of the necessary tags or scripts must be done by the website the user is currently on (e.g. Backcountry places Meta and Google pixels on the Backcountry.com website), these scripts then interact with third-party servers to set cookies, enabling tracking and other functionalities across different websites. 

These cookies are commonly used for tracking and advertising purposes. They allow advertisers to follow your activity across different websites to build a profile of your interests and serve targeted ads. For example, when you implement the Meta conversion pixel on your website to track conversions, Meta sets a cookie on your site visitor’s browser. The user visited your site, not Facebook, but Facebook can see the action the user took. 

Separately, when you’re browsing Facebook on your phone or the site, Meta also sets a pixel in the browser of those users and knows when a user has seen a Facebook ad. By having a pixel (and your login) on both the website and on the Meta platform, they can report to advertisers what actions were taken by those who saw specific ads.

However, with increasing privacy concerns, the use of these third-party cookies is being restricted, leading to the need for alternative tracking methods.

Reclassifying third-party Cookies as first-party cookies

There’s some nuance though with the first-party and third-party pixels. Unsurprisingly, advertisers have found ways to reclassify third-party cookies as first-party cookies to navigate the restrictions imposed by browsers. 

This is often done by setting up a subdomain under the main domain of the website. For instance, instead of using a third-party domain like ads.example.com, advertisers can create a subdomain such as ads.mywebsite.com. By doing this, the cookies set by the subdomain are considered first-party cookies because they are associated with the main domain. This approach allows advertisers to continue tracking user behavior while complying with privacy regulations. 

How Does Server-to-Server Tracking Work?

Server-to-server tracking offers a more privacy-compliant method of capturing user behavior data without relying on browser cookies. Instead of recording user actions on the user's device, S2S tracking involves direct communication between the advertiser's server and the publisher's server. A publisher, in this context, refers to the platform or website where the ad is displayed, such as Google or Facebook.

When a user clicks on an ad, unique identifiers such as gclid (Google Click Identifier) or fbclid (Facebook Click Identifier) are appended to the URL. These identifiers are then captured by the advertiser's server and stored. When the user completes an action, like making a purchase, the advertiser's server sends the relevant event data, along with the gclid or fbclid, back to the publisher's server.

This way, advertisers can track user interactions across different platforms and devices without needing to rely on browser cookies, ensuring a higher level of privacy while still gaining valuable insights into user behavior.

Challenges with S2S tracking

While server-to-server tracking offers many benefits for privacy and cross-platform tracking, it also presents some challenges. One major challenge is the complexity of setting it up. It requires technical effort and coordination between different systems, including complicated API integrations and managing large amounts of data.

Additionally, S2S tracking can sometimes be less accurate because it relies on precise matching of unique identifiers like gclid and fbclid, which can occasionally be missed or altered. There can also be delays, as the information recorded on the advertiser's server may not be updated in real-time, and setups aren’t necessarily passing data back to platforms in real-time.

Lastly, if these unique identifiers are blocked or changed by privacy tools, the tracking can be less effective. Despite these challenges, many advertisers find that the benefits of S2S tracking outweigh the difficulties, especially as privacy concerns grow.

Why advertisers are shifting to server-to-server tracking

Advertisers are increasingly shifting to server-to-server tracking due to the growing limitations and privacy concerns associated with pixel-based tracking. Pixel tracking, which relies on browser cookies, is becoming less reliable as browsers implement stricter privacy measures and users become more aware of their data privacy. Ad blockers and privacy tools can easily block or delete cookies, leading to incomplete and inaccurate tracking data. Additionally, regulatory changes like GDPR and CCPA further restrict the use of third-party cookies.

S2S tracking addresses these challenges by capturing user behavior data directly on the server, bypassing the need for browser cookies. This method ensures more accurate and reliable data collection, as it is less susceptible to being blocked or deleted. Moreover, S2S tracking enhances data privacy and compliance by allowing advertisers to control and secure the data they collect. By moving the tracking process from the user's browser to the advertiser's server, S2S tracking provides a future-proof solution that aligns with the evolving privacy landscape.

Meta's Conversions API (CAPI) for S2S tracking

While there are challenges to S2S tracking, there is clear value in setting it up, which is why Meta has introduced the Conversions API (CAPI) as part of its S2S tracking solutions. CAPI allows advertisers to send web events from their servers directly to Meta’s servers. This ensures that critical event data, such as purchases and sign-ups, is accurately tracked even if browser-based tracking is blocked or restricted. CAPI enhances data reliability and helps advertisers maintain effective ad targeting and measurement in a privacy-compliant manner.

Key Takeaways to Prepare for a Cookieless Future

As we navigate the evolving digital landscape and the increasing emphasis on user privacy, advertisers must adapt to new tracking methods. The shift away from third-party cookies necessitates exploring alternatives like server-to-server tracking.

S2S tracking offers a promising solution by providing a more privacy-compliant way to capture user interactions. By moving the tracking process from the user's browser to the advertiser's server, S2S tracking allows for effective data collection without relying on browser cookies. This method, while complex to implement and not without its challenges, can ensure continued access to valuable user insights in a cookieless future.

Advertisers must weigh the benefits and challenges of S2S tracking and stay informed about ongoing privacy changes. As the landscape continues to shift, those who proactively adapt their strategies will be best positioned to maintain effective and compliant marketing practices.