Australia & New Zealand small firms lift marketing spend

Small businesses in Australia and New Zealand are increasing marketing spending despite economic pressure, according to new survey findings from Constant Contact. The research also found that owners expect economic conditions and artificial intelligence to have the biggest impact on their businesses over the next 12 months.

Among small and medium-sized businesses in Australia and New Zealand, 38 per cent identified economic factors such as inflation and interest rates as the issue most likely to affect them over the coming year. AI and automation followed at 30.1 per cent.

Rising goods costs were the biggest source of stress, cited by 52.7 per cent of respondents. That was followed by unpredictable cash flow at 35.6 per cent, wage pressure at 26.7 per cent, and declining revenue at 24.4 per cent.

Even so, the data pointed to continued confidence among business owners. Nearly 78 per cent said they would start their business again today, while 6.1 per cent said they were certain they would not.

Many owners are also putting more resources into customer outreach. Across Australia and New Zealand, 67.3 per cent said they had increased the time spent on marketing, while 64.4 per cent said they had raised their marketing budgets.

That increase comes as businesses face pressure to win new customers and keep existing ones. Almost half, or 47.7 per cent, said their biggest marketing challenge this year would be acquiring new customers. Another 32.3 per cent pointed to retaining current customers, while 30.9 per cent cited learning to use new marketing tools and technologies.

Marketing focus

Social media and email remain central to how smaller businesses promote themselves. Unpaid social media was among the most-used channels, cited by 45.8 per cent of respondents, followed by email marketing at 41 per cent and paid social media advertising at 29.5 per cent.

Regular posting, however, remains uneven. A third of respondents, 33.3 per cent, said they post on social media once a week or less, a higher share than in the United States, the United Kingdom and Canada.

Owners still place significant weight on their presence on those platforms. More than 93 per cent said social media matters for reputation and credibility, while 91.6 per cent said it is important for customer engagement. A further 88.6 per cent linked it to staying competitive, 87.6 per cent to revenue, and 83.3 per cent to customer support.

At the same time, many businesses appear to be trying to avoid over-reliance on third-party platforms. Some 88.6 per cent said they were confident their business would survive if social media disappeared tomorrow.

Cost and complexity remain barriers to marketing. About 24 per cent said marketing is too expensive to do well, while 22 per cent said it is difficult to tell what is working and another 22 per cent said it takes too much time to manage.

AI uptake

Use of AI and automation in marketing has risen sharply among surveyed businesses in Australia and New Zealand. Adoption reached 88.7 per cent by April 2026, the highest rate among the regions covered in the report.

For businesses already using the technology, the most common benefit was time savings. More than half said AI or automation had helped them save time and work more efficiently, while 31.1 per cent said it had saved money and stretched budgets further, 29.1 per cent said it had reduced errors, and 27.8 per cent said it had helped them grow faster.

The most common uses were writing emails, subject lines or social media posts, cited by 45.1 per cent of respondents. Others used AI for data analysis at 37 per cent and visual content creation at 35.2 per cent.

Customer effects were mixed. Around 34.5 per cent of businesses said customers get what they need faster, while 33.6 per cent said customers receive more tailored content, products or services. Another 26.3 per cent said the buying or support process had become smoother.

Business owners also reported concerns about customer expectations and trust. Some 31.1 per cent said customers now expect faster or more sophisticated service, 29.9 per cent said AI may reduce personal touch, and 27.6 per cent cited concerns about privacy, data use and human oversight.

Concerns about AI were also widespread among owners themselves. Data privacy and security was cited by 41 per cent, while 33.3 per cent were concerned about job replacement and 32.3 per cent pointed to legal risks. Lack of confidence and fears of inauthenticity were each cited by 27.6 per cent, while 23.5 per cent raised environmental impact.

Some businesses are still deciding how openly to discuss their use of AI. The survey found 36 per cent already practise full transparency, while 27.1 per cent either do not disclose their use or have not yet determined the best way to do so.

The survey covered 3,340 small and medium-sized businesses across Australia and New Zealand, the United States, the United Kingdom and Canada, alongside 2,255 consumers in the same regions.

"Small businesses across Australia and New Zealand continue to show impressive resilience in the face of economic uncertainty," said Renee Chaplin, VP of APAC, Constant Contact.

"Our research shows they're not standing still - they're investing in marketing and AI because they know being seen is key to growth.

"As businesses prepare for the new financial year, getting the right tools in place will be critical to attracting customers, building loyalty and driving commercial success."