Small business owners appear determined to turn challenges into opportunities as data from Constant Contact reveals a bold projection for 2026. Despite facing economic uncertainty, 68% of small and medium-sized businesses (SMBs) plan to increase their marketing budgets, a strategic move aimed at combating inflation and enhancing visibility in a competitive market.
The Q1 2026 "Small Business Now" report, which surveyed over 1,500 small business owners across the United States, Canada, the United Kingdom, Australia, and New Zealand, underscores a significant trend: businesses are opting for aggressive marketing strategies rather than retreating in the face of rising costs.
"Small business owners are entering 2026 with a clear directive: do more, but do it smarter," stated Smita Wadhawan, Chief Marketing Officer at Constant Contact. This sentiment echoes the report’s findings, which reveal that while 41% of owners cite inflation as their primary concern, they view increased marketing as essential to their survival and growth. This mindset shifts marketing from a discretionary expense to a vital component of business strategy.
The data highlights an evolving landscape for small businesses as 74% of owners anticipate dedicating more time to marketing initiatives. The dual objectives of maximizing impact and maintaining efficiency are expected to guide spending and time allocation in the upcoming year.
Small business owners are increasingly reluctant to let inflation dictate their visibility. In fact, a mere 14% plan budget cuts, illustrating a collective intent to invest in marketing despite economic headwinds. As Wadhawan notes, this translates to a focus on leveraging efficiency and innovative tools, particularly artificial intelligence (AI), to enhance marketing operations without overwhelming staff.
Key findings reveal the challenges small business owners must navigate as they ramp up their marketing efforts. An overwhelming 44% of participants identified customer engagement as the leading obstacle in 2026. As businesses enhance their spending, connecting with their audience remains a paramount concern. To tackle this challenge, half of the SMB owners are prioritizing efficiency strategies, while one-third are experimenting with new technologies and tools designed to boost engagement.
AI is emerging as a critical ally in this endeavor. More than half (54%) of small business owners now use AI marketing tools, with 45% employing these technologies to analyze trend data and 44% using AI for content composition. This sophisticated level of usage highlights a growing awareness of the importance of tech-driven solutions in achieving marketing effectiveness.
When it comes to marketing channels, small businesses are firmly betting on digital strategies. Social media takes the lead, with 68% of owners identifying it as a key driver for business growth in 2026. Email marketing follows closely at 41%, while traditional advertising and in-person events lag behind, cited by 26% and 29% respectively. This shift underscores the growing significance of digital engagement in the modern marketplace.
As small businesses prepare for 2026, the findings from the Constant Contact report present a clear call to action: while challenges like inflation loom large, the entrepreneurial spirit is undeterred. By investing in marketing and harnessing technology, businesses can navigate uncertainty and drive growth.
The implications of these insights for small business owners are profound. Increasing marketing budgets, focusing on digital platforms, and leveraging AI tools can lay the groundwork for enhanced visibility and customer engagement. However, with customer engagement as a substantial hurdle, careful planning and strategic execution will be essential.
In this proactive landscape, small business owners are not only surviving but are positioned to thrive in an evolving economic climate. For further details and insights, read the full report here.
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