You will need to answer a few questions before that;
Where is your audience located and how old are they?
Being able to target people right in the vicinity of your place of business is incredibly powerful. After all, if you have a brick and mortar store or offer an in-person service, it’s really only people that are nearby that will be able to take advantage of your services.
If you have an ecommerce business, local targeting can still be effective. But instead of targeting an audience where you live, think about the locations where people are likely to live that will buy your product. Look at past sales records. Do many of your sales come from the same cities? Where do the bulk of people that are following you on Facebook live?
Not sure where to find this information? Go to your Facebook Page Insights and select “People.” You can sort to see not only where all of your followers live, but where your most engaged followers live too. You’ll also find age and gender information, which will come in handy.
Do you customers belong to a specific demographic?
In Facebook Ads Manager, you’ll find “Demographics” under “Detailed Targeting,” and it refers to everything from education to financial factors like income and net worth, whether or not they own a home, when they were born, when they were married, whether they’re in a relationship, their family status, politics, where they work and what they do at their job.
So as you adjust your target audience, just be sure to keep an eye on your Estimated Daily Results. Super-targeted ads are great, but not when your target is so specific that it only encompasses a handful of potential viewers.
What are they interested in?
You’ll also find “Interests” under “Detailed Targeting.” This is where you can specify an audience that is specific to your brand or product. Looking to target gamers? Fashionistas? Technophiles? Sports fans? Facebook makes it easy to narrow down by all sorts of interests.
You can also target your audience according to “Behaviors,” including purchase behaviors and intents.
Next, let's look at what else we can do to improve our targeting.
Size of your Target Audience
The size of your target audience is more important than you know. It’s easy to go wrong in the first step by going too narrow. The smaller the audience target, the higher the chances of tough competition resulting in higher CPM (Cost per thousand impressions). A narrow audience will also cause under delivery of your ad.
Remember, the Facebook algorithm is already built to narrow your target audience based on your campaign objective. For example: If your campaign objective is to get video views ( or even app installs ) — Facebook algorithm directly narrows down the audience to those who are prone to watch videos or install an app through Facebook Ads.
Further, after a first few hundred clicks (word around is 300), the algorithm further narrows down the audience automatically based on other profile attributes and social behavioural inputs.