You can create three types of Facebook audiences to target: Custom Audiences, Lookalike Audiences, and Saved Audiences.
A Custom Audience is one that matches customer emails, phone numbers, Facebook user IDs or mobile advertiser IDs to people on Facebook, or that create a list of people who have previously visited your website or used your app.
A Lookalike Audience is one that includes Facebook users similar to your most valuable audiences. You can find similar users based on a Custom Audience you have created, your Facebook page, or people that have been to your website. You can create multiple Lookalike Audiences in order to bid differently based on percentage of similarity.
A Saved Audience is the type of audience you can create at an Ad Set level, targeting any combination of locations, demographics, interests and behaviors.