You can build the best campaign in the world, but if you put it in front of the wrong people, it will fail. Targeting is about being in tune with your avatar (which you have created already). You want to answer the following question:
Who wants to buy your product and why?
You don’t have to describe your avatar/market with their demographics any longer (e.g. gender, income, marital status, ethnicity, number of children, etc.). They really don’t tell you much about your avatar, and show you no purchase intent. In fact, demographics rarely matter unless you can only serve a specific one. The way you want to be thinking about your avatar comes down to intent: you want to know what they’re interested in, doing, and thinking about on a daily basis
1) Interest-based (for cold traffic)
2) Intent-based (for warm traffic)
If you already have a customer list, start with a lookalike audience. This basically tells Facebook to find people similar to the people in your customer list, and show them your ad. If you want to attract a new audience or are starting out fresh, then use interest-based targeting.