In 3 words,

A Custom audience is an audience based on your existing customers/consumers/brand lovers.

In Meta-words,

“A Custom audience is an ad targeting option that lets you find your existing audiences among people across Meta technologies. When you're ready to grow your business, you can use your Custom audience to create a lookalike audience.”

__ From Meta Help Center

Discover all types of Custom audiences

📚 Learn more about:

Website custom audiences
App-activity custom audiences
Customer list custom audiences
Engagement custom audiences

What is a “Lookalike” audience on Meta?

Share an audience with another Meta Business Manager

Create a Custom audience by uploading a customer list

Create a Custom audience based on website visitors from a Meta Pixel (tracking pixel)

Create a Custom audience based on a video