A new report says local businesses are loving Facebook. But does the number seem a tad high to you?

MerchantCircle, an online network of local business owners in the U.S., recently conducted a survey and found that 70 percent of these business owners use Facebook to market. The trend is rising, as this represents a 20 percent increase from 2010.

(To reach this conclusion, the study asked respondents: Are you promoting your business with the following websites/services?)

“Facebook has now surpassed Google (66 percent) as the most widely used marketing method among local merchants, and is almost tied with Google search (40 percent) as one of their top three most effective marketing methods, with 37 percent rating Facebook as one of their most effective tools,” according to MerchantCircle.

The quarterly Merchant Confidence Index survey, conducted from Jan. 22 to Feb. 3, also found that 40 percent of local merchants are using Twitter.

MerchantCircle surveyed roughly 8,500 local and small-business owners nationwide. More than one million small businesses have joined the social network, the company has 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,” said Darren Waddell, vice president of marketing at MerchantCircle. “The marketing methods we see gaining the most traction are therefore the ones that offer merchants simplicity, low costs and immediate results.”

How are small businesses spreading the word on Facebook? In some cases, it's very low-tech. Take this example from PR Daily publisher Mark Ragan. In the comments section to this story, he said:

“I know local pubs that have created Facebook fan pages and Twitter feeds to publicize special discount offers on everything from a bottle of beer to a dry cleaning. I am writing this comment on Tuesday morning from my favorite family diner in Chicago. On the door leading into this restaurant is a sign scrawled in the manager's handwriting: 'Like our Facebook page and we'll give you a free cup of coffee.'”

Ragan grabbed this photo of the sign to illustrate his point.



For some marketers and PR pros on Twitter, the 70 percent figure seemed high. Responding to a tweet from PR Daily publisher Mark Ragan, who had shared an earlier version of this article, several Twitter members questioned the data.

"I absolutely do not believe this,” Lee Odden, the CEO of TopRank Marketing in Minneapolis, tweeted in response. Several people retweeted Odden, indicating that they agree with his skepticism.

A study conducted a year ago by FedEx office said that only 36 percent of small business owners planned to adopt social media marketing (including Facebook and Twitter) in 2010.

What do you think? Too high?

(Image of graph via)

This story has been updated since it was originally published this morning.