Shared Vs Dedicated IPs: Pros and Cons, Part 1

Email Marketing

This is a two-part series that discusses the pros and cons of shared vs. dedicated IPs, to help companies make the right decision for their email marketing efforts.

An IP address is an exclusive number online that services and devices use to identify you. Think of it as a mailing address. You might have your own dedicated address (as, say, your home address) and you might also have a shared address (as, say, an office address).

Your ESP – email service provider –hosts email marketing services on its servers. It could be a stand-alone email service provider, or it could be one part of an integrated marketing automation provider (such as Act-On), which surrounds your email with complementary services. Either way, along with choosing a provider that best suits your marketing and sales teams’ needs, it is also important to have the right infrastructure behind the service. Many email service providers will automatically apply the infrastructure that’s suited to their own objectives, but others give you the option to decide. This series will help you to identify which one is best for your company.

Shared IPs

A shared IP is an IP that is used by several other companies or senders.  For a real-world example, imagine a shared office space in which six companies have spaces there, and all use this address:  The Sloan Building, 1234 Washington St., Chicago Illinois, 60202.

ESPs typically have several pools of shared IPs, which allows them to distribute volume across the pools. Each pool holds the appropriate number of mailing contacts for IPs to handle the volume going off of them at any single moment. The placement of pools is managed on the back end by engagement metrics, such as complaint rates, bounce rates, and open and click rates.  Any fluctuation in these metrics on the pools can positively or negatively affect your sending practices.

Pros of Shared IPs

  • Volume is already established and consistent.  This means you don’t have to work through a “warming up” period in which receiving ISPs (such as Gmail and company ISPs) must learn to differentiate your IP from spammers. They already know the address you are sending from is established, proven, and good, so it’s far more likely that your mail will be received (all other things being equal). So, you are able to easily and quickly get your mailings out without worrying about establishing a consistent volume with the ISPs.
  • Get help from other senders.  With a shared pool, you are sending with other senders and therefore their metrics and engagement numbers can help your marketing initiatives.
  • Cost is relatively low.  The costs to maintain shared IPs are lower than to maintain dedicated IPs.

Cons of Shared IPs

  • Risk of some loss of brand and reputation at email sending level. When using a shared IP pool environment, your sending brand integrity is merged with all the other brands; true reputation can only be established at the ESP and IP level, not at your brand/domain level.
  • Negative help from senders. Just as your sending reputation is enhanced when others in the pool follow best practices, there could be a negative impact on the IP address (and on your sending reputation) if other senders in your pool implement less than ideal practices. That said, ESPs that manage pools are careful to monitor sending practices, for everyone’s benefit.

Shared IP pools are particularly good for companies that send on a irregular basis and or don’t have a large list of recipients. In both those cases, ISPs will not have the history of interacting with you to apply high levels of trust.

Shared IP pools are also great for companies that are just launching, or just starting email marketing, for the same reasons: With a IP pool, you’ll be using a known and trusted address.

Stay tuned for part 2 of this post, and for more information on deliverability, check out our Best Practices in Email Deliverability white paper