The just-released Small Business Now report for Q1 from Constant Contact reveals that small business owners are meeting today’s economic headwinds with aggression rather than retraction. Though many (41%) are primarily concerned about inflation and rising costs, most “plan to invest significantly more resources into their marketing efforts to grow their businesses.”
Smita Wadhawan, Constant Contact’s Chief Marketing Officer, observes that the latest data “shows a fascinating tension—inflation is the number one worry, yet businesses are choosing to increase their marketing budgets rather than cut them. This signals that entrepreneurs view marketing not as a discretionary expense, but as the essential lever for survival and growth. By leaning into efficiency and AI tools, they are finding ways to maintain this increased pace without burning out.”
According to the report, small business owners are still striving to implement “newer and more efficient” operations—many through marketing.
Indeed, 74% of small business owners plan to invest more time marketing their businesses, and 68% expect to increase their marketing budgets. Only 14% say their marketing budgets will decrease. Their focus for 2026 is to maximize the impact of every dollar and hour spent.
Key Findings from the Q1 2026 Small Business Now Report
- The Search for Engagement and Efficiency: As businesses ramp up spending, they face a significant hurdle: connecting with their audience. The top anticipated barrier to marketing in 2026 is customer engagement (44%). For solutions, 50% of SMB owners will prioritize efficiency strategies, and 33% will test new tools and technologies.
- AI: The Analyst and the Author: AI is fast becoming the tool of choice to bridge the gap between high effort and high efficiency. Most (54%) of SMB owners already use AI marketing tools, and 27% plan to implement AI tools this year. That usage is becoming more sophisticated: 45% use AI to analyze trend data, 44% use it to compose emails and content copy, and 40% will create images and visual content with AI tools.
- Social and Email Lead the Channel Mix: SMB owners are betting on digital over traditional as the channel that will drive the most business in this year. Social media (68%) and email marketing (41%) lead the pack, while traditional advertising (26%) and in-person events (29%) ranked significantly lower.
- Rework or Start from Scratch? Most SMB owners (48%) plan to tweak their existing marketing campaigns, while 31% expect to create brand new campaigns for 2026.
Do More, But Do It Smarter
According to the Small Business Now report, small business owners are entering 2026 with a clear directive: do more, but do it smarter. Despite concerns about rising inflation, SMB owners recognize that marketing is essential and are willing to increase their marketing budgets to survive.
Rieva Lesonsky is the founder of Small Business Currents, a content company focusing on small businesses and entrepreneurship. You can find her on Twitter @Rieva, Bluesky @Rieva.bsky.social, and LinkedIn. Or email her at Rieva@SmallBusinessCurrents.com.
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