There’s a great video about this here, where I learned the following:
Open PDF in Acrobat Pro, and go to Advanced > PDF optimizer.
If your PDF is only going to be read by other people (and not opened in other versions of Acrobat) choose the latest version of Acrobat. On my program that’s Make compatible with “Acrobat 9.0 and later”.*
For images, choose Bicubic downsampling to 96 pixels per inch for images above 100ppi. **
For compression, Jpeg 2000.
For Quality Medium is fine, unless your jpeg image has text, in which case choose lossless (or change the compression method to “ZIP”).
Get rid of extraneous content by going to the Discard User Data tab and tick Discard all comments, Discard document information and Discard file attachments.
In the Discard objects tab tick Discard embedded page thumbnails, Discard all alternate images and Discard embedded print settings.
In Clean up everything except Discard unreferenced named destinations should be ticked by default, but if not tick everything here.
Now you can save the preset by clicking the big button at the top. And that’s it.
* Which version to save as?
If the PDF is only to be read, then save as the latest version of Acrobat – anyone who reads it can download the latest version of Acrobat Reader for free. The later the version of Acrobat, the smaller the file size.
If the PDF is going to be opened by someone else in Acrobat, you might want to think about saving in an earlier version. At the moment Acrobat versions 4 through 10 (X) are all supported and being used. Version 7 came out in 2005, so I think it’s a pretty safe bet most people would have at least that version by now. Note Acrobat 4 does not support transparency, and should be avoided.
** Why 96 dpi?
This seems an odd number, and I’m not sure how relevant it is anymore, but apparently it makes Windows users happy.