Unity Software offered advertisers a workaround to avoid losses from Apple's iOS 14 App Tracking Transparency, but it didn't work and company shares are now down 37%.
ATT came as Apple also replaced its IDFA, the Identifier for Advertisers framework, which previously enabled companies to identify users enough to target ads to them. Apple has instead now offered advertisers an alternative framework which it says helps them get the information they want, but without affecting user privacy.
Unity Software, however, believed that it could work around ATT in part by monitoring websites to see when users visited them, instead of using their iPhones to track where they were going.
According to MarketWatch, this Pinpointer ad product of Unity's didn't work. Consequently, its flawed information led to buyers reducing their ad spending.
The result is that shares finished down 37% at $30.30, the company's worst figures since its September 2020 IPO when shares were $52 each.
However, MarketWatch quotes analysts who say that while it was Unity Software's Pinpointer product that was the chief reason for the drop in share price, the system has now been fixed.
"While the core issues are now resolved, it will take time to retrain the machine learning algorithms and win back ad spend that migrated away early this year," said Morgan Stanley's Matthew Cost. "We also believe the guidance includes a secondary impact, as engineers have been redeployed to fix these issues were forced to delay their other projects (many of which would have contributed incremental revenue) until later in '22/'23."
Unity Software CEO John Riccitiello told CNBC that it was fixing the issues, and said it had reduced its financial guidance because it is going to take time to address the problem.
"We brought our guidance down, and what that's about is [a] self-inflicted wound," said Riccitiello. "We did some things on the advertising side of the business that reduced the accuracy of our models."
"It's going to take us a couple of quarters to fix," he continued, "and we're going to have slower growth for a couple of quarters while we fix that."