MerchantCircle, an online network of US local business owners, revealed in its quarterly reports that more local businesses are turning to Facebook and other social networking sites like Twitter, as a low-cost option for their marketing efforts.

The survey, conducted with 8,500 random small and local business owners across the U.S, revealed that 70% of these business owners are actively marketing their business through Facebook. This represents a 20% increase over 2010.

Most small businesses running on limited budgets (less than $2,500 annually) and 60% of survey respondents do not plan to raise their budget this year. This makes Facebook an attractive and cost-effective marketing tool for most local business owners.

Darren Waddell, Vice President of marketing at MerchantCircle said:

Online marketing continues to be a challenge for most local businesses, and many merchants are working with very small budgets and almost no marketing resources. The marketing methods we see gaining the most traction are therefore the ones that offer merchants simplicity, low costs and immediate results.

Facebook’s location check-in also seems to have been adopted quite well by small businesses. According to the survey results, 32% of small businesses saying they use the feature, compared with just 9% who have tried Foursquare.

An interesting statistic I came across recently indicated that a Facebook page or status update is 3 times more effective than a twitter “tweet” when trying to reach online consumers.

With Facebook now becoming more than just a social networking site and proving itself as the latest channel of online marketing its not too late for you to get your very own Facebook page.

We recently highlighted the need for small businesses to create a Facebook page including details on how it can stand out from the rest.

Originally published at iNeedHits