Here's the perspective of a local business. For my self storage business, Google PPC ads work very well. I only target 20 miles around my location and use mainly local keywords. This keeps the costs down and delivers motivated targeted traffic. SEO is also very strong, using the same locally targeted keywords. To rank well, we've used local directories and local information/review websites for links. Articles and PR also give good incoming links. We've also got a blog pointing at the site. The key to the blog is regular posting. That all brings traffic, but it's conversion that's crucial. We always have a Google Website Optimiser A/B test of something. It's one of my favourite tools. Hope the "local" view is of interest.
All of the social media networking methods are excellent. However, we must also remember the traditional marketing methods. Word of mouth, bulletin boards (Walmart & other public forums, lawn signs, rubber stamps are some of these methods that you should utilize. Good luck!!