
This is going to be the most important part of your Facebook campaign.
Location: Based on the offer that you are promoting select the country accordingly. Be sure to have read the description of the offer, you do not want to waste $20 in UK clicks when the offer is only open to US visitors. If you are promoting a general offer such as Napster's music trial leave the Location to Everywhere.
Male/Female: Depending on the offer.
Keywords: This is the power of Facebook and why it's a marketer's wet dream. Basically by entering a keyword such as "music" you can target everyone who has "music" listed in their their list of interests. Better yet you can also dig deeper and find people that are interested in a particular artist, say Metallica. The only downside is that Facebook doesn't cross-reference these keywords, instead it shows your ads to anyone who matches one of those keywords.
So if you're promoting Napster, and your ad has Green Day in the title do not choose the keywords "music" and "Green Day" just choose "Green Day".
Education: This is a fantastic feature and a great way to get clicks. Let me explain by using an example:
Say we're promoting a Citibank credit card offer that pays a lead for every new application. A great way to get clicks would be to target to university students who the vast majority are struggling with tuition fees and book fees. Create ads targeted directly at specific schools or universities.
NYU students credit card offer A special offer for NYU students. Get a zero % interest rate credit card with 2% cash back.
Now when our NYU student logs on to her facebook account you can be sure this ad will catch her attention a lot more than a generic "get a 0% interest credit card" type ad.
It doesn't matter if the program you are promoting has any offers specifically for that particular school, it's just a way to increase your CTR and your conversion rate.
Workplace: Similar to Education you can target specific workplaces (Browse the networks and find the largest workplace networks to advertise to.
Relationship status: This is mostly useful if you're going to be promoting affiliate dating leads. Needless to say, choose "singles" to advertise to.

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