Market Update: Small businesses investing in marketing, despite uncertain economy – Full Analysis

When times get tough, the old playbook says to tighten your belt and cut costs wherever you can. But small businesses in 2026 are flipping the script.

For Constant Contact’s latest “Small Business Now” report, we surveyed more than 1,500 small business owners to understand their concerns and marketing strategies for 2026. While they see the current economic hurdles loud and clear, the vast majority are refusing to hit the brakes. Instead of shrinking their marketing budgets, small businesses are hitting the accelerator: 68% of small business owners expect their marketing budgets to increase in 2026, while 74% expect the time they spend on marketing to increase this year.

The message is clear: the winning strategy isn’t to hide out until the storm passes. It’s to invest your time and money into the growth driver of your business — your marketing — to come out stronger on the other side.

Investing in what already works

So where is all that investment going? It’s flowing directly into the proven, high-impact digital channels that small businesses believe in most.

When we asked which channels they expect to provide the most value this year, the answer was decisive: 68% expect social media (organic posting and paid ads) to be their most valuable channel, with email marketing following at 41%.

The takeaway is simple. The smartest businesses are concentrating their efforts on a powerhouse duo of social media and email — channels they trust to deliver measurable results.

AI becomes a practical growth tool

And there’s a new tool in the toolbox helping them do more with less. Fifty-four percent of small businesses are already using AI and another 27% plan to start this year, relying on it for tasks like analyzing trend data (45%), writing emails or other content (44%) and creating images (40%). Businesses aren’t replacing their strategy — they’re enhancing it.

2026 action plan

You’ve seen what other small businesses are doing. Here’s how to turn those insights into your own action plan.

Tip #1: Master your high-value channels to be seen

Small businesses are putting their faith in social media and email marketing because they believe these channels will deliver the most value. The move isn’t just to use them — it’s to master them.

Don’t just post — connect. Don’t just send emails — build relationships. This is where your marketing investment will work the hardest, so make every dollar (and every minute) count by focusing your energy on what works and get your business seen.

Tip #2: Make AI your new assistant

One of the biggest hurdles for any small business owner is the never-ending need to create fresh content. We know the pain of staring at a blank page when you have a million other things to do.

Consider joining the 81% of small businesses that are already embracing or planning to use AI this year, and use it to tackle the “blank page” problem for good.

Ask it to analyze trends to find out what your audience wants to hear about. Or let AI compose a first draft of your next email newsletter, turning an hour of work into 10 minutes of editing.

Think of AI as your assistant freeing you from time-consuming manual tasks so you can focus on big-picture strategy.

Tip #3: Put your marketing on autopilot

Working harder isn’t the answer; working smarter is. With 50% of small businesses prioritizing efficiency, the goal is to get more done with less manual effort.

That means having a system that works for you even when you’re not working. Use a single platform that can streamline and automate your high-value channels. Instead of jumping between tools, manage your social media and email marketing in one place.

Then use automation to handle repetitive tasks. Set up a welcome series for new subscribers, automatically send abandoned cart reminders, or schedule a month’s worth of social posts in one sitting.

Realism meets strategic resolve

While small businesses are feeling economic pressure, they aren’t just hoping for the best; they’re actively planning for success. Fifty percent are prioritizing “improving efficiency” and 36% are creating or refining their marketing strategy to ensure they succeed in the year ahead.

What does this tell us? Small business owners have a healthy dose of realism — but an even bigger dose of strategic resolve. They know the environment is tough, but they’re betting on their ability to work smarter in order to succeed.

2026 is not a year to sit on the sidelines

The message from small businesses is loud and clear: 2026 is not a year for sitting on the sidelines. Despite economic challenges, the overwhelming strategy is to invest strategically instead of pulling back.

If you’re feeling the pressure of rising costs, know you’re not alone. But more importantly, know that you’re in good company when you choose to face these challenges head-on and invest in your business’s growth.

Opinions expressed by SmartBrief contributors are their own.

If you liked this article, sign up for the SmartBrief Marketing Pulse, a daily look at the latest in shifts and performance data for marketers.