Reduce the performance issues
The main advantage of server-side tacking is the streamlining of data flows. Instead of sending as many requests as there are vendors, a single request is sent to the SSTM, which will take care of sending the data to the other vendors.
As it is the SSTMS that takes care of this distribution of requests instead of the TMS running in the browser, the resources required for tracking are drastically reduced: fewer requests to send and fewer scripts to load. Also, optimising the loading time will be beneficial for SEO. Indeed, these actions will inevitably bring some improvement to Core Web Vitals and we know that these measures are important because Google has announced that the data will be rolled in as a ranking factor and the deployment of this update was done on the 15th of June 2021.
But this is only true if everything is moved to the server side. In reality, there are still some technological constraints, but also some nonsense. Such as Facebook asking to keep tracking on the client side to continue to collect as much data as possible and to deposit 3rd party cookies for its «LookaLike Retargeting» algorithm.
Regain control over the data
Besides reducing the risk of breaches caused by the loading of 3rd party scripts in the browser, vendors will only be able to get the data that the SSTMS has chosen to send. They will no longer be able to use the data available in the browser, as in an all-you-can-eat buffet.
Furthermore, as all processing is done on the tracking server, we can perform real anonymisation and obfuscation tasks. Thanks to this technique, known as "Proxyfication", we can address the issue of data protection more effectively. We can really protect users because we choose what is sent, to whom and in what format. But the implementation of server-side tracking does not allow us to circumvent the law in any way, as consent is still required. Yet, if true anonymisation were implemented (the removal of any element allowing direct or indirect identification of a user), this would allow us to free ourselves from the consent need. But the degradation of the data will be such that we advise using measurement tools dedicated to the analysis of aggregated data.
Also, with the server-side approach, it is possible to bypass content blockers (AdBlockers). In fact, the request is sent to your tracking server, not to the vendors. It is thus undetectable by the plugins. For the moment, this is a boon for tracking, but if this detection were to adapt to this new tracking mode, we advise you not to find a way to bypass it. We advocate respecting the user's wishes. We always prioritise the maximum protection of user data.
Finally, it is also possible to make the tracking server communicate with other external services (APIs), such as a CRM or a PIM system, and thus be able to perform data enrichment. This would allow you, for example, to collect product data from the databases and thus lighten the data layer in the frontend.
You can find other benefits and drawbacks of server-side tracking in this complete blog post of Simo Ahava.