Fetopolis and Facebook seemed like a match made in heaven. The Toronto-based publishing company ran several online fashion magazines like Fashion Style Mag that each had millions of Facebook fans. Daily posts with fashion advice or slideshows of hot new styles regularly received thousands of likes and enthusiastic comments.

Raaj Kapur Brar, Fetopolis's owner, liked what he saw. Facebook seemed like the perfect place to reach out and drive traffic to his magazines, so Brar decided to take it to the next level with a huge, 6-figure Facebook advertising campaign. What happened next is the stuff of a small business owner's nightmares.

A 4 day campaign. Over $600,000 spent. His return? Basically zero.

Brar's story is an extreme example of what happens when businesses try to make up their advertising strategy as they go along. Unsurprisingly, when a company loses $600,000, more than one thing went wrong, and there are lots of lessons to learn. But Fetopolis made one huge mistake that looms larger than all the others, and it's one that any company can avoid with just a little thought and planning--they didn't take the time to target their audience.

Figure out who you're targeting, and you can do more with $60 than Fetopolis did with $600,000.

What the Heck Happened?

Wait, wait, you say. Surely this guy didn't just give Facebook his credit card info, set up some ads, and blow up his whole advertising budget in less than a week?

Well, not exactly. Brar definitely didn't go in blind. He'd run some small beta tests on Facebook ads that showed the potential for 2-3x returns. And remember, his magazines had millions of likes. It's not a big stretch to assume a well designed campaign could drive many of those fans to his websites.

Yet within just a couple days, it was clear something was terribly wrong. Fetopolis was getting hundreds of thousands of clicks on Facebook, but Bitly and Google Analytics were saying only a fraction ever actually made it to a Fetopolis website. And although likes on their Facebook pages started going way up, Brar noticed that more and more of them were from clearly fake accounts.

After just 4 days, Fetopolis stopped the campaign, having spent well over a half million dollars on mostly meaningless clicks. But that wasn't the end of it. Long after they'd stopped their ads, their Facebook pages continued to garner thousands of likes from fake accounts on a regular basis, which drove their page engagement way down and made it look for all the world like Fetopolis was paying to inflate their their page likes with fake fans.

How Poor Targeting Cost Fetopolis a Fortune...

We don't have an insider's look into Fetopolis's Facebook strategy, but based on what happened we can make some pretty confident assumptions. First, they didn't set a total budget, and probably used Cost per Click (CPC) bidding, which meant being charged for clicks anywhere on an ad, not clicks that lead to conversions. Those are bad mistakes, but they weren't the worst ones. What really sent the budget into the stratosphere was poor targeting.

Fetopolis didn't take the time to really define and target their audience. Instead, they chose a broad audience, which scattered their ads around the site haphazardly and never reached the people they intended them to.

It's also a good bet that they targeted them based on user interests. That worked fine on Facebook at one point, but nowadays it's a recipe for disaster. That's because more and more often fake accounts target pages with similar interests to those they are paid to target. The problem was compounded because Fetopolis also had a large audience in countries like India that were notorious for being filled with "click farms" of fake accounts. All these decisions attracted thousands of fake users to like their pages, which kept on long after they stopped the campaign.

And How You Can Avoid Their Mistake

Chances are, people who are losing out big time on Facebook advertising, or really in any other kind of advertising, are doing a poor job of targeting their audience. Luckily, you can do better, and reach potential customers or drive traffic to your site without blowing up your budget. The trick is to start small and expand out gradually as you learn more about who's interested in your ads.

If you're planning a Facebook campaign, there are valuable tools you can use to narrowly target an audience. The best targeting option right now is Custom Audiences. If you have the necessary information--things like email lists, phone numbers, and user IDs--you can reach exactly the audience you want to attract. Once you have your custom list, you can leverage this information to expand your target audience even further. Facebook can build Lookalike Audiences (people who are like your custom audience) and get demographic information on these audiences through Audience Insights.

You should also be targeting audiences by country. If you only sell your product in the U.S., reaching out to people in Brazil is a waste of money. It will also help you avoid "click farms" that could spam your pages with fake fans.

Facebook has the tools you need to create great ads, if you take the time to use them. But there's more you can do. Using a social media management tool like AdEspresso can help you easily set demographic targets, create better custom audiences, and analyze campaigns to find out what are ideal customer profiles for your company.

Facebook Ads (Can) Work!

Most companies aren't going to lose 6 figures on a Facebook campaign. But running ads on Facebook still makes lots of entrepreneurs and marketers anxious. Every day there are more articles and posts about how "Facebook ads suck" from jaded business owners who got burned by low returns and fake accounts.

Don't believe them. It's hard to get Facebook ads right, because advertising anywhere is hard. But the truth is, any advertising you do is going to work well if you can do two things: create an interesting ad, and get it in front of a highly interested audience. Guide your ads to the right audience by leveraging all the tools Facebook has to offer, and you're going to get real people off their feed and onto your landing page.

And you won't even have to break the bank to do it.

Published on: Jan 26, 2016
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.