I had no luck getting tar to exclude a 5 Gigabyte subdirectory a few levels deep. In the end, I just used the unix Zip command. It worked a lot easier for me.
So for this particular example from the original post
(tar --exclude='./folder' --exclude='./upload/folder2' -zcvf /backup/filename.tgz . )
The equivalent would be:
zip -r /backup/filename.zip . -x upload/folder/**\* upload/folder2/**\*
(NOTE: Here is the post I originally used that helped me https://superuser.com/questions/312301/unix-zip-directory-but-excluded-specific-subdirectories-and-everything-within-t)