Dedicated vs Shared IP | How They Affect Email Deliverability

What is the difference between a dedicated IP and shared IP regarding email deliverability? How do we decide which one to use? This may seem like a technical issue email service providers (ESPs) or marketing automation platforms (MAPs) use to charge you more, but the decision can impact your ability to connect and engage with your audience in a big way.

What is a Dedicated IP?

Each sender has a unique dedicated IP address. No other company, organization, or individual can send from that IP address. Many think they should move to a dedicated IP address because they won’t be affected by other senders and will be in complete control of their reputation (a common misconception). We don’t always recommend dedicated IP addresses. In fact, we recommend senders should only move to dedicated IP addresses if:

• They are higher volume senders. Each ESP is different on how they view a ‘higher volume sender,’ but we recommend a minimum of 100,000 campaigns per month.
• The sender has the volume to be on a dedicated IP address, and other users on the shared IP address affect their reputation and inbox placement. This also includes blacklists and spam traps.

Be prepared to pay for a dedicated IP address. Depending on the ESP (Email Service Provider), it could be a hefty fee each month.

What is a Shared IP?

Multiple senders use a shared IP address. This means a sender in Kalamazoo, MI, could be using the same IP as someone in Pittsburgh, PA. For example, say someone sends their emails through Hubspot without a dedicated IP address. When they send their marketing emails, they will be in a shared IP pool with other senders using Hubspot to send the emails.

While a shared IP address may be good for a smaller-volume sender’s brand, it still requires users to share their reputation with other users. ESPs understand this and try to put the brands in similar IP pools.

• Always ask ESPs about the other users in the sending pool. One bad egg affects everyone else, and most importantly, sending infrastructures.
• Shared IP addresses are more cost effective than dedicated IP addresses.

Monitor each IP address used––especially the reputation of each IP address––as each affects deliverability differently. 

How a Dedicated IP Affects Deliverability

A business having a dedicated IP address means only that specific business is responsible for their reputation. If a company makes one mistake (using a bad link in an email, not following proper IP warming practices, etc.), it will have repercussions for a while. If the business does something to hurt their reputation with the ISPs, it will take time for them to regain their trust as a sender. This, in turn, affects inbox placement and deliverability.

If an IP address lands on a blacklist or hits a large amount of spam traps, it’s nobody else’s fault except that one business’s. This makes it easier for them to figure out the cause.

An ISP uses sending reputation to choose whether or not to deliver the message to the inbox. A dedicated IP address becomes white-listed easier than a shared ISP. Spam filters identify white-listed senders as ‘safe senders.’ Therefore, a sender on a whitelist passes through spam filters much easier than someone who isn’t whitelisted. For example, asking AOL to whitelist a dedicated IP address will increase the chances of an approval, as opposed to a sender who has multiple shared IP addresses asking to be white-listed. 

Note: Don’t think that being whitelisted is permanent. Sending practices can always get a sender removed. 

Using a dedicated IP can also affect one’s deliverability in another way: sole ownership in DNS records. DNS records point right back to the brand. For example, if someone were to perform a reverse DNS lookup on a company’s dedicated IP address, it would have information that is associated with that company’s brand only.

Each blacklist filters differently. After landing on a blacklist, figure out the problem, and avoid making the same mistakes in the future. Fixing an issue and repeating it both have contrasting effects on deliverability. And fixing an issue and then repeating it hurts deliverability on a whole different level. However, fix the issues and avoid them in the future to increase reputation.

• One holds responsibility for their own reputation.
• A dedicated IP joins a whitelist easier than a shared IP.
• One possesses sole ownership in DNS records.

How a Shared IP Affects Deliverability

Shared IPs involve sharing reputation. Just like the dedicated description, this can be a good or bad thing. This depends on the type of IP pool the senders are in and the type of senders that are sharing the IP address. While more cost effective, a shared IP address increases the chances of hitting more spam traps. In addition, the chances increase with each additional company who shares the IP address. This uncertainty is why ISPs typically reject adding shared IP addresses to whitelists. And as a result of not being on a whitelist, the senders in the shared IP address have a harder time passing the spam filter. 

As part of a shared IP, DNS records don’t point back to just one company. Being part of a shared IP means the IP groups the DNS records, as well. 

If you are a lower volume sender, a shared IP address may be just right for your company because you won’t have to worry about the amount of spam trap hits versus your reputation taking a plummet because of the hits.

What Next Steps Can I Take?

Several factors come into play when a company decides whether to use a dedicated or shared IP. First, look at the total volume of emails sent each month. Then ask if it is worth obtaining a dedicated IP address? Factor in the cost. Review the content and how the company acquires email lists. Start following best practices if they are not already implemented. Weigh out the pros and cons of both shared and dedicated IP addresses. If a shared IP feels like the right choice, research the IP pool you are in and how your ESP groups their users.

• Look at the volume of emails sent.
• Factor in the budget.
• Examine contact acquisition.
• If selecting a shared IP, research your pool and the ESP groups/users.

Choose a dedicated IP if you have a ‘high sending volume,’ want to be in control of how your reputation develops, have sole responsibility in your DNS records, and have a larger budget. For a shared IP, research the group you are in because your chances of hitting more spam traps and blacklists increase with the amount of companies using the IP address. It will be harder to whitelist a shared IP, and DNS records don’t point back to just your company. However, this option is nicer for a smaller budget. Whichever IP you decide to choose, make sure to factor in all of the variables above. This one decision can have a large impact on your reputation with ISPs.

For IP address help, contact one of our Deliverability Experts.