Image credit: Markus Spiske
Ad-targeting: This is when, say, Facebook uses a combination of human discretion and automated processes to create an ad category corresponding to a particular subject (a process Facebook declines to describe). From there:
Facebook users then effectively sort themselves into the targeting category by liking and visiting certain pages on the social network and through other activities they engage in on the service. Facebook has said that liking a page is one signal among many that helps it place users into the categories that advertisers can target.