Opportunity Alert: SMB Ad Spend Will Rise in 2026, Despite Fears

Tariffs. Inflation. Economic anxiety at record highs.

It doesn’t feel like a year when small businesses would spend more on marketing—yet that’s exactly what’s happening. Most expect 2026 to be challenging, but only 8% plan to cut marketing, and 39% plan to increase it.

It’s a golden opportunity for agencies, but that doesn’t mean it’s an easy one to capture. SMBs aren’t throwing money at agencies; they’re being more selective than ever.

They’re investing in marketing that can prove it drives revenue.

And that’s the opportunity: agencies who show proof will capture the spend. Those who can’t will lose it.

The Opportunity Exists—But It’s Not Automatic

SMBs aren’t buying “more marketing” for fun. They’re buying insurance against a difficult year.

Over 70% say ROI is “very important,” second only to revenue. Conversion rate and cost per lead follow close behind.

They want leads, but they want certainty even more.

That’s why 84% of SMBs increasing budgets say they’re doing it to drive more leads and sales, not to build awareness or experiment.

In other words: they will spend, but only on agencies who can remove financial guesswork.

What we’re seeing isn’t an economic rising tide. It’s a funnel that’s narrowing toward the agencies that can prove revenue.

What SMBs Are Buying

When budgets go up, the money flows toward channels with measurable outcomes:

• 47% will increase search advertising
• 47% will increase social media ads
• 53% will increase video marketing

These aren't awareness plays. Search ads capture high-intent buyers. Social ads retarget prospects. Video builds trust before the call.

All of these channels produce trackable conversions that can be connected to revenue—if the agency has the right system.

The ROI Attribution Gap Is the Real Budget Killer

Here's what kills agency budgets in a tight economy:

An SMB spends $10K/month on Google Ads. Leads come in. Some close, some don't. When the SMB asks "which campaigns drove revenue?", the agency points to:

• Google Ads conversion data (clicks and form fills, no revenue)
• CRM data (deals closed, no proof it came from marketing)
• Call tracking (phone leads, no connection to ad spend)

The data exists in three places. None of it answers the question.

So the SMB cuts the budget. Not because the marketing failed, but because the agency couldn't prove it worked.

What Winning Agencies Do Differently

Winning agencies have shifted away from reporting marketing activity. They report business outcomes.

Collideascope is a perfect case in point: by qualifying every lead and syncing revenue back to Google Ads, they achieved:

• 3x more qualified leads
• 61% lower CPL
• 8% reduced ad spend

Their clients didn’t increase budgets because the economy improved.

They increased budgets because proof reduces fear—and fear is the real constraint.

Read More: The Optimization Flywheel: How Collideascope 3Xed Qualified Leads and Cut CPL by 61% [Case Study]

How to Capture Rising SMB Spend

The opportunity is clear: SMBs are spending despite economic fear, but only with agencies that prove ROI.

To win those budgets, agencies need to:

1. Audit your leads for intent and value.

SMBs don’t care how many conversions you drove; they care which ones turned into actual cash. Tag calls and forms for:

• Purchase intent
• Service relevance
• Quote value

This instantly shows which campaigns deserve more budget.

2. Determine cost per lead—for qualified leads.

When budgets tighten, CPL is meaningless unless all of the leads are real. Show clients:

• Traditional CPL
• Cost per qualified lead
• Cost per closed qualified lead

This is the reporting gap that very few agencies will fill (which makes it an easy way to set your agency apart).

(To do this, you’ll need a system that tracks your marketing leads all the way to their sales outcome—if sales leads are siloed in the CRM, it will be impossible to figure out what happened to your leads after they entered the funnel.)

3. Connect closed leads back to their campaign and keyword.

This is what lets SMBs confidently decide where to increase or decrease their budget. Tie revenue to things like channels, search terms, landing pages, and ad groups.

When you can say “this channel produced $18k last month,” increasing spend on that channel (and ultimately, extending your agency’s contract to manage that channel) becomes a no-brainer for your client.

4. Identify wasted spend by filtering out low-intent calls.

When you can see exactly what happened to each of your leads, you can do more than just filter out spam. Legitimate calls can still be low-value—existing customers, wrong numbers, competitors, and price shoppers are real people, but they will never make a purchase.

Show clients how much of their ad spend went to non-buyers. More importantly, show them how you identified it, stopped it, and redirected that waste to a keyword or ad group that’s actually generating customers.

This is how you turn fear into confidence, even in a tough economy.

The Bottom Line

Economic fear is rising. But SMB ad spend is rising faster.

The agencies that prove ROI will capture that growth. The ones that can't will lose budgets—not because their marketing failed, but because they couldn't prove it worked.

Ready to prove your value and protect your ad budgets?