Risk-averse companies are looking to big tech for reassurance because of GDPR and privacy concerns.

The General Data Protection Regulation, or GDPR, which went into effect across the European Union last year, has pushed marketers to spend more of their ad dollars with the biggest players, in particular Alphabet Inc.’s Google and Facebook Inc., ad-tech companies and media buyers say.

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Paris-based Teemo, which uses location data to help marketers target their ads, was one of the first companies to be rebuked under the GDPR. France’s privacy regulator ordered the company to stop processing individuals’ location data without their informed consent. The company has been rebuilding its business to be compliant with GDPR. While it is growing, revenue from its data business isn’t expected to reach its pre-GDPR level until this summer, says CEO Benoit Grouchko.

« If you work with a small data company, it’s not as reassuring, » Mr. Grouchko says. « With Google and Facebook you know you’re not taking a risk as an advertiser. »

There are still a lot of questions around GDPR. Regulators have an opportunity to interpret the law how they see fit. Many companies are waiting to see how regulators will handle the new laws. Questions around consent and privacy are already brewing. Because of all these uncertainties, companies must be cautious. Taking an approach that leans towards better protection will ultimately be the best option.

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GDPR Has Been a Boon for Google and Facebook by Nick Kostov and Sam Schechner