Dedicated and Shared IP Address Pro/Cons: How to Keep ISPs Happy

An IP address is similar to a physical address. As a brand, your “technical email identity” is defined by the IP address you are sending email from in addition to the domain you are sending email from. When an Internet Service Provider (ISP) such as Yahoo!, Gmail, or Hotmail, sees email being sent from your IP address and from domain, they use this to identify where the email is coming from and as a reputation component to determine if you are a reputable sender.

Most larger ESPs will give you the option of a shared or dedicated IP address with a cost differential associated with each. A shared IP address means other customers are sending from the same IP address. If you’re on a dedicated IP address, you are the only customer sending from that IP address. Since ISPs like to see consistent traffic coming from your domain / IP address combination, it is important to use the below factors to determine which option makes the most sense for you.

Reasons to choose a shared IP address:

1. Lower cost.

2. Spammers tend to send email in spurts and then abandon the IP address they’re sending from.  Recognizing this, ISPs like to see a consistent volume of email being sent and a consistent sending pattern, which are two of the many factors ISPs utilize in determining whether or not to block our emails.

3. Therefore, if you are sending low volumes, have large spikes and valleys in your volume, or have inconsistent sending patterns (once or twice a month), you might always be stuck with a neutral reputation or no reputation at all. This can cause issues with getting your email into the inbox.

4. Since you are sharing the volume and consistent sending patterns with other customers on the same IP address, you can leverage the reputation that has been previously developed on these IP addresses.

5. You will not need to go through the IP address “warm up period” required for new dedicated IP addresses.

6. If your volume is less than 50MM a year and the volume of your email addresses are less than 500K a week, your ESP might recommend a shared IP address.

7. If you do choose a shared IP address, make sure that your ESP actively monitors all senders in the shared IP pool to ensure compliance with email sending best practices.

Reasons to choose a dedicated IP address:

1. You will be responsible for and be able to control your own reputation, as opposed to “sharing” your reputation with other customers.

2. If your volume is a minimum of 50MM per year and you have a consistent sending volume with at least 500K per week, then it makes sense for you to be on your own IP address.

3. Please note that if you do have a dedicated IP address, the ISPs require you to go through an initial “warm-up” period of 6-8 weeks. The goal of “IP warming” is to establish a reputation as a legitimate email sender in the eyes of ISPs.

Dedicated and shared IP addresses are both good options, but you need to consider the above points when deciding which approach suits your specific needs. We also recommend that our customers use a list scrubbing or hygiene service (e.g. REACT or Audit & Hygiene from FreshAddress) to clean up their lists, correct syntax errors and eliminate spamtraps and invalid addresses before they start using a new IP address.

Your ESP can partner with you to help provide a recommendation. Your choice may evolve over time: you might start sending from a shared IP address and then move to a dedicated IP address if your growth and sending patterns warrant it. No matter which option you choose, remember that healthy sending, careful email address acquisition and hygiene, and opt-in practices are imperative.