Among small businesses using AI heavily across multiple functions, 60% have already cut their external marketing spend, according to the Citizens Q4 2026 Business Pulse survey released September 29. The same cohort is also hiring faster and expects a better quarter than everyone else, which locates the marketing-agency category as the first visible casualty of operational AI inside the small business segment.
Citizens Financial Group fielded the survey of 500 U.S. business decision-makers between September 1 and 17. Of the heavy-AI users, 94% have reduced or eliminated spending on at least one type of external service. Marketing led the cuts at 60%, followed by data analysis or reporting services at 39% and bookkeeping or accounting at 38%. The ordering isn’t incidental: marketing is the function where generative tools have reached usable output quality fastest, and it’s the function where small-business owners most often felt they were paying for work they could evaluate but couldn’t produce themselves.
The optimism gap is where the story gets structural. Across all respondents, 54% expect revenue to rise next quarter, a 2026 high that’s climbed from 43% in Q1, 48% in Q2, and 50% in Q3. Inside the heavy-AI cohort, that figure is 74%. Confidence in the broader economy runs 51% among extensive AI users versus 29% overall. On hiring, 44% of the heavy-AI group plan to add full-time employees in Q4, against 22% overall and 8% among businesses with no AI plans at all.
“A business owner who becomes a super user of this technology can compete like a much bigger company, and that’s showing up in hiring plans,” said Mark Valentino, Head of Business Banking at Citizens.
The headline economic data is otherwise unremarkable. 83% of businesses plan to maintain or increase headcount; only 3% plan cuts. 30% intend to raise technology spending in Q4, up from 23% in Q3. The dispersion inside those averages is what the martech industry should actually be reading.
A separate October 1 MarTech roundup catalogued the same 60% and 39% figures alongside new AI product launches from PostcardMania, Eulerity, LiveRamp, Gong, Iterable, and Yext. That juxtaposition is the real signal. The vendors building AI into the marketing stack are selling into a buyer who’s just defunded the agency layer immediately above them. Whether those budgets flow into software, into internal headcount, or into nothing at all is the open question. The Citizens hiring data suggests at least some of it’s becoming payroll.
What the survey doesn’t settle is whether the 60% figure describes substitution or disintermediation. If small-business owners are producing comparable marketing output themselves with AI assistance, agencies lose a tier of accounts permanently. If the output is worse but cheap enough to tolerate, the cuts reverse the first time revenue stalls. Q1 2027 is when that gets tested.
Sources
- https://investor.citizensbank.com/about-us/newsroom/latest-news/2026/2026-09-29-120028526.aspx
- https://martech.org/the-latest-ai-powered-martech-news-and-releases/
- https://www.monitordaily.com/small-business-optimism-rises-amid-steady-hiring-and-increased-ai-spending/
- https://www.financialcontent.com/article/bizwire-2026-9-29-citizens-q4-2026-business-pulse-finds-rising-small-business-optimism-amid-steady-hiring-and-increased-ai-spending
- https://pbn.com/citizens-survey-small-business-revenue-optimism-hits-2026-high/