Facebook, Google, and many other Internet companies make the majority of their money off advertising.
They provide products that attract views and they resell those views to advertisers.
They are able deduce information about where you are roughly from your IP address. They also use cookies to track you around the web and based on that and information that you provide to partners they can create a pretty accurate picture of who you are.
These companies allow advertisers to target their ads based on this user information. For instance a 55+ community may only want to advertise to people that are 55 or older. This is called microtargeting. It is also used to run advertising campaigns narrowly focused on a small group of people.
A candidate for office may target the Hispanic community with Spanish language ads that describe what the candidate will do for that community.
Facebook and social media formats allow advertisers to limit their ads based on where people live, their age range, ethnic affinity, and other attributes.
The ethnic affinity option and others could run afoul of laws that make it illegal to advertise a racial preference housing, employment and the extension of credit.
These advertising categories could allow a client to potentially violate the Fair Housing Act and Title VII of the Civil Rights Act of 1964. These laws require both the client and the advertiser to prevent discrimination.
The activist journalism organization ProPublica purchased an ad that targeted people who were house hunting and did not have an “Ethnic Affinity” of African-American, Asian-American or Hispanic. If this had been an advertisement for housing it could have been a violation of the law.
ProPublica’s story led Facebook to say they would remove the option to select Ethnic Affinity when clients were advertising any of these protected types of ads. If you are placing a housing ad, Facebook has stated that they will remove the option of “Ethnic Affinity,” provide educational materials on appropriate advertising, and require you to declare you are not engaging in discriminatory advertising.