Facebook has started to roll out local awareness advertisements, which is a new advertising type that can be utilized by business owners.

As the name of the feature implies, the new form of advertising allows marketers to target Facebook users that are physically near a certain location, which would allow business to attract new customers by showing their advertisements to people within their neighborhood.

According to Facebook, local awareness advertisements, compared to traditional advertisements taken out on newspapers and flyers, are more cost-effective. Local awareness ads also offer more precision when targeting specific markets, along with grater reach.

While the feature can be effectively used by local business as another method to reach potential customers nearby, the ads also allows users to discover businesses when they visit a certain area.

The ads can be created through Facebook's Ads Create tool, under the Local Awareness option. Users can then select the Page of which business will be promoted, along with the radius of the reach of the advertisement.

The marketer is then asked to specify a gender and age for the target audience of the ad, and the allocated budget for it. Facebook will show an estimate of the number of people that the ad will reach daily, and the cost of the ad.

The ad can be finished by adding text and image to it, along with an optional call-to-action button.

Facebook says that the new feature will not invade a user's privacy, as the advertiser will not see a specific list of users. In addition, users can choose to keep their location private by turning off location services for Facebook.

The new feature looks to remedy the declining exposure of small business in Facebook ads, which was caused by adjustments that Facebook made on the formulas for Page promotions.

While location was already previously used in the ads seen by Facebook users, the information only comes from the listed hometown of the user. The addition of the usage of mobile location data will allow Facebook to deliver ads that are contextually relevant with users that are in a specific area, which is a goal of many tech companies.

Facebook's local awareness advertisements may be a great feature for local businesses, but its success will hinge on whether users are receptive to them. While the location-tracking feature provides relevant ads, users may feel that their privacy is being invaded and could force them to turn off location services.

The feature is being rolled out to advertisers in the United States in the coming weeks and to the rest of the world in the coming months.