Dedicated or Shared IP? How to Choose the Right One for Your Email Strategy

When it comes to email performance, does it matter whether you use a dedicated or shared IP address? SEO veteran Tammy Wood of Automation Anywhere has an answer. She lays down the pros and cons for each – so you can make the right choice.

As a business owner, you understand the importance of content within your marketing strategies. It’s probably your focus when it comes to your blog posts, social media and most likely, your email marketing.

Email marketing is one of the primary marketing strategies for SaaS businesses, although any business can benefit from a well-crafted email. By engaging your readers with your marketing emails, you can encourage them to choose your business over your nearest competitors.

Dedicated or shared IP configuration – which one do you need?

No matter what email marketing trends you follow within your business, all your efforts will be for nothing if your emails don’t end up in the recipient’s inbox. One factor that affects deliverability is your IP address.

Internet Service Providers (such as Yahoo and Gmail) often block certain IP addresses in their fight against spam. They do this based on the reputation of the IP address in question.

If your IP address has a bad reputation, the chances of your emails arriving in the inbox are slim. This is bad news for you when you’re trying to reach out to new and existing customers.  

Of course, there are other reasons to send an email. There will be times when you need to communicate with employees, investors, and other people that are integral to your business.

As part of the order to cash process, invoices will also go out via email. If any of these emails end up in spam, the day-to-day functioning of your business will be compromised. 

With all of this in mind then, we circle back to the question in our title. What IP configuration is right for your email strategy?

To ensure your emails are coming from an IP address with a good reputation, should you choose a dedicated or shared IP address? In this article, we’ll take a closer look at the two options to help you decide.

What is an IP address?

IP stands for Internet Protocol. An Internet Protocol address (IP address) is the unique string of numbers that is given to each computer on your network. It is made up of four numbers separated by dots. 

The IP address also identifies the server on which your website files live. When it comes to email marketing, the IP address will allow the ISP to identify the server that’s sending emails. 

When you hit Send, your email is transmitted to an outgoing mail server. Then, it goes to the mail server at the receiving ISP. As mentioned, what happens to your email is partly based on the reputation of the IP address. This is just one factor that determines whether your email goes to the recipient’s inbox or to their spam box. 

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As part of your process improvements, knowing whether to have a dedicated or shared IP address is something you need to focus on. By making the right decision, you will improve the efficiency of your business and find greater success within your growth strategy. 

How do shared and dedicated IP addresses differ?

With a shared IP address, several companies use the same IP address within one mail server. When it comes to emails, more than one company will be using the same IP when they send out their email messages. 

A dedicated IP address is only used by a single sender. Therefore, only one IP address is being used by the company that is sending out emails to its customers, clients, and business personnel.

This is the difference between the two in their simplest terms – but which should you choose? Especially when it comes to your email marketing, the decision you make could be a crucial one. 

Let’s consider both types of IP addresses. 

Using a shared IP address

As mentioned, a shared IP address is used by a group of companies to send out their emails. A group of IP addresses is known as a “shared IP pool”. 

Shared IP pools are used by most email service providers. They’re common among low-volume and irregular senders.

There are advantages to using a shared IP address. For one, it is relatively inexpensive. 

Shared IPs are cheaper than dedicated IPs due to the shared cost between senders using the same service, so this could be one clear benefit for you.

If other senders use good email practices, you can also develop a good IP reputation quickly, even if you only send out a low volume of emails. That reputation boost can increase your deliverability rate to the recipients’ inbox.

However, as your reputation depends on the email practices of every other sender using that IP, the opposite can be true, too. So, while you could gain a good reputation quickly if the other senders follow best practices, you can also gain a bad sender reputation if they don’t. This is especially true if other senders spam their recipients. 

Their bad moves will be seen as your bad moves, so your emails might end up in spam. It might also be that your emails end up on an email blacklist. 

Thankfully, most email service providers implement software bots to identify and block abusive senders. This can reduce the risk to your sender reputation as the bad behavior of others can be predicted before your emails are affected.

However, for your peace of mind and to ensure stronger deliverability, you might decide to use a dedicated IP configuration for your emails. 

Using a dedicated IP address

As a business owner, you know there’s no room for error when it comes to your marketing. Your chances of growth rely on your customers and clients, which is why you’ll be using best practices within your BPM (Business Process Management).

With the correct technologies at your disposal, you can mitigate the risk of error and experience greater amounts of success within your business. This is something to consider within your email marketing.

As we’ve established, a shared IP address can be problematic, especially if your sender reputation is negatively affected by others. For this reason, you might want to consider a dedicated IP address instead. 

With a dedicated IP address, you are the only person accountable for your reputation. Other senders’ email marketing practices won’t affect you, so you don’t have to bear the brunt of their mistakes. Your company alone will use that IP address, so as long as you take care to manage your sender reputation, your emails will reach your customers. 

Now let’s go through a few steps you can take to improve your sender reputation.

#1. Only send your emails to contacts that want to hear from you

Email servers use engagement metrics to determine the quality of your emails. If people opened, respond to, and passed on your emails, the greater the quality of engagement. So, narrow down your list of recipients to those who are more likely to engage with your emails. 

#2. Be mindful of your content

Improve your email marketing with tailored content to ensure more people engage with what you have written. And within that content, provide call-to-actions to encourage a response. 

#3. Leverage automation tools

With an automated solution, you can compose your emails and send your messages out to the right people at the right time. This will improve the click-through rate of your emails. 

With a dedicated IP address, your efforts to improve your sender reputation won’t be all for naught. As you won’t have to worry about the actions of other senders, you can tailor your email marketing to ensure the best possible results. 

Another advantage of a dedicated IP address is the speed at which your emails will be sent. As you are the only business using the IP, your emails will go out immediately, with no risk of them being placed in a queue with other senders’ messages. As time is of the essence in marketing, especially where promotions are concerned, this will be one thing you can cross off your worry list.

Rounding Up: Which IP configuration is right for your business?

If cost is your major concern, you might decide on a shared IP address. As the expense is spread across more than one user, this is one way in which you can save money in your business. As a dedicated IP will often require setup and maintenance fees, you might decide a shared IP is better, especially if you only send out a few emails a month.

On the other hand, remember the quality of your sender reputation. Even if you do have to pay more for a dedicated IP address, you have greater peace of mind that your emails will reach your subscribers. There are other ways to save money on your marketing, such as using no-code automation tools to carry out the tasks on your to-do list.

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So, despite the expense, you should see a greater ROI on your email marketing if you opt for a dedicated IP address. As the right people will receive your emails timely and efficiently, there’s a greater chance of them responding to your marketing messages. Profits should then increase in your business and you’ll have a better opportunity to grow.

When it comes to which IP configuration is right for you, the answer might now be clear.

Author: Tammy Wood has been involved with SEO for two decades. Her current role is Director of Technical SEO for Automation Anywhere, an automation company. While not chasing keywords or innovating process automation, Tammy enjoys reading, buying shoes and writing articles about both RPA and SEO. Here is her LinkedIn.