Raaj Kapur Brar runs a small but successful empire of online fashion magazines from his base just outside Toronto. Some of his titles are huge online brands, such as Fashion & Style Magazine, which has 1.6 million Facebook fans.That’s more fans than Elle magazine has. Even his niche brands, such as South Asian Fashion, are huge — it has 1.7 million fans. A typical Fashion & Style post will get 2,000 likes.
His umbrella company, Fetopolis, is exactly the kind of marketer-publisher that Facebook has encouraged to take advantage of its 1.2 billion-strong audience. Fetopolis’ titles post a constant stream of new pictures and fashion ideas, his followers love them, and he gets money from clothing labels to push content.
Recently, however, Brar has fallen out of love with Facebook. He discovered — as Business Insider reported recently — that his Facebook fanbase was becoming polluted with thousands of fake likes from bogus accounts. He can no longer tell the difference between his real fans and the fake ones. Many appear fake because the users have so few friends, are based in developing countries, or have generic profile pictures.
At one point, he had a budget of more than $600,000 for Facebook ad campaigns, he tells us. Now he believes those ads were a waste of time.
Brar’s take is a cautionary one because Facebook has 25 million small businesses using its platform for one marketing purpose or another. Many of them are not sophisticated advertisers — they are simply plugging a credit card number into the system and hoping for the best. This is what can happen if you don’t pay careful attention to contract language, or the live, real-time results your campaigns on Facebook are having.
An unpaid bill of $379,000.
A review of emails from Facebook, ad campaign dashboard screengrabs, and billing records show a confusing, acrimonious dispute in which both sides believe the other acted badly. It’s not even entirely clear what Brar’s total spending was: Campaign budget data seen by Business Insider appear to show that Brar ran at least $489,000 in ads on Facebook. One email from Facebook demands payment of an unpaid bill for $370,000. Brar himself believes he ran up to $640,000 in ads.
To be fair to Facebook, this is the advertising business — the company can guarantee exposure but not results. Advertise the wrong thing in the wrong way, and you’ll lose your money. Clearly, the vast majority of businesses that use Facebook for marketing are pleased with the experience. Facebook’s growing revenues, up 63% last quarter, indicate it is only getting more successful at selling advertising, not less.
And, of course, Brar is a disgruntled former customer with a bone to pick. There is a fair amount of he-said, she-said in the retelling of what happened between Brar and Facebook. Obviously, both sides dispute what the other is saying.
A Facebook spokesperson told us, “This business owner is using press as a customer service channel. In fact, very recently he has asked us to allow him to run more Facebook ads on credit. We have been in touch with Raaj and hope to continue working with him directly, and not through the media, to find a solution. When he asked us to look into a specific click report to verify referral traffic, we did so with bit.ly and verified that the number of clicks reported were accurate.”
Here’s how Brar believes it went down: He became interested in advertising on Facebook in 2012, and he took it seriously. He went to Facebook’s local Toronto office where he was trained to use the advertising interface. They set up the campaign, and ran a small “beta” test. Then, in late October Brar pulled the trigger on a massive push through Facebook’s Ads Manager. He used Bitly and Google Analytics to measure the number of clicks his campaign was generating.
The results were disastrous, Brar says. $100,000 a day on Facebook ads.
Facebook’s analytics said the campaign sent him five times the number of clicks he was seeing arrive on his sites, which Brar was monitoring with Bitly, Google Analytics, and his own web site’s WordPress dashboard. There was a reasonable discrepancy between the Bitly and Google numbers, Brar says, but not the five-fold margin between Google’s and Facebook’s click counts.
At one point, data from Facebook indicated his ads had delivered 606,000 clicks, but the site itself registered only 160,000 incoming clicks from Facebook, according to data supplied by Brar. (160,000 clicks is a not insignificant return. After all, these are not clicks on a mere Facebook page, these are users who clicked through to an off-Facebook site.)
Worse, after just a few days of running the campaign — at a spend rate of up to $100,000 a day, the kind of budget that Macy’s or Walmart might devote — it became clear that the revenue being generated by the campaign would never pay for the ads. Brar was hoping that the small sum he was paying for Facebook ads would be profitably eclipsed by the much more expensive Google ads he was running on his websites. He was arbitraging the traffic, essentially — which is a routine practice in online marketing. (Via Business Insider) more…