More than a third of UK businesses (36%) now use Facebook to attract new customers, according to data from Basekit.

This makes it more popular as an advertising tool than local business directories such as Yellow Pages and Thomson, which are used by 27% of the 500 small businesses surveyed.

The use of online advertising is now almost as common as print advertising (20% vs. 21%), and Twitter is also quickly gaining popularity (17%).

Basekit co-founder Simon Best said the move to Facebook and Twitter is primarily driven by the lower cost of entry:

Small businesses tell us that one-to-one marketing is their most efficient and most successful way of generating new business.

                   

The news that small businesses are increasingly turning to social networks for customer acquisition will come as good news to Facebook and Twitter as they have both been making efforts to lure SMEs to their ad platforms.

In January Facebook announced that it would be giving away £4.2m of free advertising to SMEs across Europe as part of its Ad Boost programme. Then in March, Twitter launched a self-serve ad platform for SMEs in partnership with American Express.

The aim for both networks is to convince SMEs to pay for advertising rather than relying on free brand pages.

In other Facebook news, it has been announced that user data will be used to target ads while they are on sites outside of the social network. This comes as part of its revamped data use policy, which also provides clarifications on how it uses cookies and how long it retains user data.

While Facebook does not currently show ads offsite, TechCrunch suggests that it may have plans to launch its own ad network.

Facebook has taken several steps to boost its revenue streams in recent weeks, including launching a new app store and trialling paid-for status updates, so it wouldn’t be that surprising if it decided to further monetise its database by launching a new ad network.

With 526m daily users to target, the earning potential is seemingly limitless…