Small Businesses Boost Marketing Budgets Amid Economic Uncertainty

Small businesses are taking bold steps into 2026, choosing to increase their marketing budgets even amid economic uncertainty. A recent report from Constant Contact reveals that 68% of small and mid-sized businesses (SMBs) expect to boost their marketing expenditures to combat looming inflation, highlighting a resilient mindset in a challenging economic landscape.

Amidst ongoing concerns about rising costs—cited as the primary worry by 41% of small business owners—the data suggests a strategic pivot. Instead of retreating from marketing efforts, these entrepreneurs are gearing up to seize new opportunities. “Small business owners are entering 2026 with a clear directive: do more, but do it smarter,” said Smita Wadhawan, Chief Marketing Officer at Constant Contact. This insight underlines a collective shift in thinking about marketing as an essential investment rather than a discretionary expense.

The report shows that 74% of small business owners plan to invest more time in marketing strategies in 2026. With apprehension about economic pressures, the focus is on maximizing the effectiveness of both financial resources and time spent.

Key findings from the Q1 2026 Small Business Now report reflect a landscape where investment in marketing is outpacing fears of economic downturn:

• Refusal to Cut Budgets: While almost half of SMB owners highlight inflation as a major concern, 74% plan to invest more time into marketing, and 68% are setting aside larger budgets. Notably, only 14% anticipate cuts in their marketing budgets.
• Barriers to Engagement: The quest for engaging customers remains a significant challenge. The report identifies customer engagement as the top barrier to effective marketing in 2026, with 44% of respondents indicating difficulty in connecting with their audiences. In response, 50% of SMBs are experimenting with efficiency strategies, and 33% are eager to test new marketing tools and technologies.
• The Rise of AI: More than half of the surveyed small business owners (54%) are already leveraging artificial intelligence (AI) in their marketing efforts. Many are enhancing their strategies, with 45% using AI to analyze trends and 44% employing it to create content.
• Preference for Digital Channels: With a clear shift from traditional advertising, social media (68%) and email marketing (41%) are poised to be the leading channels for driving business in 2026. In-person events (29%) and traditional advertising (26%) lag behind, echoing the larger trend towards digital engagement.

For small business owners, this focus on digital marketing opens up new avenues, but also introduces potential hurdles. Businesses will need to closely monitor customer engagement while ensuring that their increased marketing efforts yield tangible results. The pressing question is: how do they connect effectively with an audience that increasingly demands authentic and engaging content?

The findings underscore a pivotal moment for small businesses. As they allocate more resources to marketing, understanding the dynamics of digital engagement becomes crucial. Employing AI tools could streamline these efforts, freeing up time and energy for more creative and strategic pursuits.

In an environment where customer connections are paramount, the practical application of enhanced marketing budgets cannot be understated. Small businesses that leverage efficiency strategies while embracing innovative tools may find themselves at a distinct advantage in navigating both economic challenges and customer expectations.

The report suggests that as 2026 unfolds, small business owners aiming to thrive will need to stay adaptable. Balancing the need for increased marketing with an eye on efficiency and engagement can help to ensure sustainability and growth, even in tough economic times.

To read more about the findings of the Constant Contact report, visit Constant Contact.

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This article, "Small Businesses Boost Marketing Budgets Amid Economic Uncertainty" was first published on Small Business Trends

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