Digital marketing tools provider Constant Contact just released its latest Small Business Now Report, “The State of Small Business Marketing.” The study reveals a growing gap between the effort SMBs are putting into marketing and their confidence that those efforts are driving meaningful business results.
The report found that despite increased marketing budgets and more widespread use of tools like email marketing, AI and video, only 18% of small businesses feel “very confident” in the effectiveness of their marketing. That number is down from 27% in 2024.
While many small businesses are taking the right steps to grow their businesses, many still struggle to translate that effort into success. Economic pressures, limited time and shifting customer expectations also make it difficult to adapt and feel certain about what’s working.
“Small businesses are under real pressure to see positive results from their marketing, but many feel like they are doing more without getting more back,” said Smita Wadhawan, chief marketing officer at Constant Contact. “They are working harder than ever, but without the time, expertise or data to guide them, many are still guessing about what will resonate with their customers.”
Economic Pressure is Forcing Small Businesses to Pivot
Small businesses around the world continue to face economic pressures, according to the report, but only 17% feel “very prepared” to adapt to uncertainty. In Canada, many are leaning into the “Buy Canadian” movement, while SMBs in Australia, New Zealand and the UK are more optimistic about what’s ahead.
“In response to economic pressures, including the negative impact of tariffs, small businesses are making several strategic adjustments,” says Dave Charest, director of small business success for Constant Contact. “Globally, 46% of SMBs have raised prices. Many are also finding new suppliers, with 39% doing so globally. Additionally, 22% of SMBs globally have delayed planned launches.”
Charest explains that these actions are part of a broader effort to manage the ripple effects of tariffs and global trade shifts.
Additional Marketing Efforts
Despite the current headwinds that small businesses are facing, brands continue to scale up their marketing efforts. According to the report, many are increasing marketing spend, embracing technology and returning to proven channels like email to drive results.
However, overall confidence has declined over the last year.
“Many SMBs are putting more time and money into their marketing than they have in years, often doing ‘more of everything.’ Thirty-seven percent have increased their marketing budgets this year,” Charest says. “Despite these efforts, many SMBs still ‘feel like they’re guessing which channels are working and what’s actually driving results.’ They lack confidence in their marketing effectiveness and often don’t know ‘what’s working, how to track success or how to get more from their efforts.’”
According to Constant Contact, what small businesses need now is guidance, support and tools that are built for their way of working. Specifically, they need help to:
- Make sense of their marketing activities.
- Be more productive and creative, often with the assistance of AI.
- Connect with customers in more human ways.
- Gain a clearer understanding of what their customers are responding to in their marketing to confidently invest in what works and abandon what doesn’t.
Small Businesses Turning to AI and Video
Technology adoption continues to rise, with AI and video playing a growing role in small business marketing strategies, according to the report. While some remain hesitant about AI, those using it across multiple channels have seen strong performance gains.
The report found that 48% of small businesses are currently using AI in their marketing. They primarily use AI to save time and gain marketing know-how. Common uses include:
- Writing emails, subject lines or social media posts (37%)
- Creating images (29%)
- Analyzing data (25%)
Meanwhile, the report also found that 78% of small businesses use video in their marketing. This helps them connect, build trust and tell their story in a relatable way. The most impactful video formats include:
- Customer testimonials (27%)
- Company culture videos (26%)
- Promotional content (25%)
- Practical advice (25%)
“Overall, SMBs are investing more in ‘more of everything,’ including new tools and tried-and-true tactics, with a clear focus on email, AI and video,” says Charest.
