Verizon's new Wi-Fi service blocks in-app ads, ad tracking

Brief:

Verizon, the biggest U.S. wireless carrier with an estimated 151 million subscribers, introduced a service called Safe Wi-Fi that lets mobile customers block ads while they're logging onto a public network, according to TechCrunch. The virtual private network (VPN) costs $3.99 a month and hides the mobile user's IP address, which can be used to track people's online browsing activity.
Safe Wi-Fi has an "Ad Tracker Blocker" setting that prevents ad networks from tracking users while they browse the internet, and also blocks in-app ads. A gray image appears instead of the blocked ad, and websites that require ad tracking also may be blocked, per Verizon.
Verizon customers with an Android or iOS device can order Safe Wi-Fi, which allows for as many as 10 devices on a single account. Existing Verizon customers can sign up for the service through the company's My Verizon portal. Customers also can download the Safe Wi-Fi app from the Google Play Store or Apple's App Store.

Insight:

Verizon's new ad blocking service is interesting because it shows how telecoms, who are struggling to drive revenue growth as subscribers use text less frequently thanks to the growth of messaging apps, could offer services that make it harder for brands to reach wireless subscribers as a new source of revenue.

Ad blocking has existed for years on desktop browsers, and as consumers migrate their internet usage to mobile devices, they increasingly are adding ad blocking features to their mobile browsers and apps. That can be bad news for marketers seeking to reach target audiences and media companies that depend on viewership to support the creation of online content. The percentage of U.S. mobile sessions that detect ad blockers has risen to 5% this year from 2% in 2016, while U.K. ad blocking has risen to 8% from 2% during the same period, per AudienceProject data cited by Digiday.

Mobile ad blocking is likely to grow if marketers and publishers aren’t mindful of the user experience when showing viewers ads. Tech giants like Alphabet, whose Google search engine and YouTube video-sharing site depend on advertising for revenue, and Apple have introduced ad-blocking technologies this year. Google in February added a feature to its Chrome web browser that automatically blocks ads deemed as annoying. That includes pop-up ads, autoplay video ads with sound or large ads that stay on-screen while scrolling, among others, per Quartz.

Apple in September 2017 added Intelligent Tracking Prevention (ITP) to its Safari browser, which has about a 15% share of the global browser market, to the chagrin of brands and publishers. The technology prevents Apple users from being tracked by helping them manage "cookies," the pieces of code that help to identity people as they browse the internet. Ad technology firm Criteo this year said that ITP is likely to cut its revenue by more than 20% compared with estimates before made before Apple announced the feature, per the Guardian.