Small businesses boost marketing spend but struggle with results as AI reshapes strategy

Small businesses are increasing marketing spend as economic pressure persists, yet many remain uncertain about the results. According to Constant Contact CEO Frank Vella, the challenge is not a lack of effort or resources, but a lack of clarity in how marketing strategies are executed.

On the latest episode of Business Trends Today, Vella explains that while more small business owners are actively marketing, confidence remains low.

According to Vella, data shows roughly 7 in 10 SMBs have reported low confidence in their marketing effectiveness despite increased investment. The disconnect reflects a shift in the challenges business owners face as a tougher economy forces them to engage more aggressively in marketing.

Historically, one of the biggest barriers was what Vella described as the “blinking cursor” problem, where business owners struggled to create content or even know where to begin. That hurdle has largely been eliminated by advances in AI and marketing technology, which now generate ideas and campaigns quickly.

However, with that, a new challenge has emerged. The problem now becomes targeting the right audience with the right message.

Shifts in marketing

Marketing tools have evolved, notes Vella, as highlighted in recent industry findings, including a G2 report. Previously, platforms helped business owners execute tasks more efficiently, but still required them to define strategy and direction.

Today, AI-driven tools are taking on a more active role by guiding decisions, generating content options, recommending timing, and aligning messaging across channels. This shift allows small business owners to rely on technology to handle complexity while they focus on running their businesses.

Vella notes that more than 80% of small businesses are either using AI tools or plan to in the near term. By increasing efficiency, businesses strengthen their connections with their audiences.

Personalization and relevance

As marketing tools become more advanced, effectiveness increasingly depends on relevance rather than volume. Vella claims that companies are replacing broad messaging strategies with targeted outreach that aligns with customer behavior and preferences.

Technology now enables small businesses to segment audiences and tailor messaging based on engagement patterns. For example, some customers respond to promotions, while others engage more with product updates or educational content. This level of personalization allows SMBs to compete with larger organizations without requiring large teams or budgets.

Vella emphasizes that relevance is more important than frequency, reinforcing that sending fewer, more targeted messages often yields stronger results.

Conversely, while social media continues to play a role in discovery, Vella stresses the importance of building and maintaining owned customer lists. Email databases provide a direct and reliable communication channel that is not subject to changing algorithms.

Smaller, highly relevant audiences, Vella alludes, are more valuable than larger, less engaged ones. Business owners should actively capture customer data through practical methods like in-store interactions, QR codes, and digital sign-ups.

“Thinking like a marketer every day in some small way will help you be persistent and consistent.”

Balancing engagement 

Maintaining engagement requires a balance between visibility and value. Over-communication can lead to unsubscribes, while under-communication can reduce awareness, says Vella.

He also notes that not every unopened email signals disengagement. Customers often ignore messages until the content becomes relevant to their needs. As a result, broader engagement metrics, including subscription trends and customer behavior, provide better insight than open rates alone.

The goal is to remain relevant and useful without becoming intrusive.

Moreover, even well-crafted campaigns can fail if emails do not reach inboxes or capture attention. Subject lines play a critical role, but there is no universal formula for success.

AI tools now optimize subject lines by analyzing language, tone, and deliverability before businesses send emails. Platforms like subjectline.com enable companies to test and refine their messaging, improving performance and reducing the risk of being flagged as spam.

Constant Contact also prioritizes deliverability by scanning emails to ensure they meet platform standards and avoid spam filters, helping businesses reach their intended audiences more effectively.

Smarter marketing

As economic uncertainty continues, small businesses are being forced to rethink how they approach marketing. The focus is shifting from increasing spend to improving strategy through better use of technology.

AI-driven tools, data insights, and personalization are enabling SMBs to operate more efficiently and achieve stronger outcomes. However, success still depends on consistency, relevance, and a willingness to adapt.

For many business owners, the path forward is not doing more marketing, but doing it smarter by leveraging the tools already available.