Partner Insights: Join the Pool or Go it Alone? – Whether to Use a Shared vs. Dedicated IP Address

In our continuing Partner Insights series, we address timely questions vexing email marketers today. This month, we address the issue of IP addresses: whether to use a shared IP address or go it alone with a dedicated IP. This is a relevant question for both new and veteran email marketers, as our delivery volumes – and challenges – are constantly changing.

This month, we’ll get valuable insight from the following industry expert panelists:

Robert Consoli – Director, Deliverability & Provisioning Services, Silverpop

Marco Marini – President & CEO, ClickMail Marketing

Colleen Petitt – Director of Email and Digital Services, Aprimo

FreshPerspectives (FP): Robert, let’s begin with you. What factors determine whether to use a shared vs. dedicated IP address and what’s the difference between the two?

Robert Consoli: Deciding on whether to use a dedicated or a shared IP is more than just preference. There are real benefits and shortcomings to both. Knowing which one to choose can mean the difference between delivering successfully to the inbox and facing ongoing deliverability challenges.

Why choose a shared IP address? The main benefit of a shared IP address is that it should already have whitelisting and an established reputation in place. When clients send small volumes of email or infrequently, it is difficult to maintain a positive reputation. If you have multiple clients sending small volumes of email on a shared IP address, the reputation is maintained. A second benefit to a shared IP address is a lower cost for the sender. The thing to remember when choosing a shared IP address is to ensure the ESP you have chosen carefully vets, monitors, and manages their clients to ensure they are sending quality mailings to active recipients using email best practices.

With a dedicated IP address, the benefits are pretty clear. Since no one shares the IP, you have complete control of the address’s reputation. This means there’s less of a chance of being impacted by the sending performance of others. Additionally, ISPs, Inbox Providers, and Email Filters are able to draw a direct correlation between your sends and your reputation. This in turn allows for easier troubleshooting and faster resolution to any delivery issues that may arise.

Remember, whether you decide to use a dedicated IP address or shared one, always adhere to opt-in guidelines and email best practices. This alone will determine your email deliverability success.

FP: Marco, how would you address this question?

Marco Marini: As an email marketer, you can have your own dedicated IP address for your organization, or you can be part of a shared pool. As with most email marketing decisions, there are pros and cons to each.

First, let’s talk about who should even consider a dedicated IP. Typically, if you are a high volume sender, it is recommended that you purchase a dedicated IP. A dedicated IP is also a smart choice for low volume senders with a high value per subscriber, because you want to ensure your deliverability rate is as high as possible.

Having complete control of your sending reputation—and therefore deliverability—is perhaps the number one benefit to choosing to pay a little more for a dedicated IP address. Other senders cannot influence your IP reputation as they can in a shared pool, because the IP address is yours alone.

A few things to keep in mind when purchasing a dedicated IP address: it takes time to ramp up, and it is more expensive. With a dedicated IP, you’re only as good as the last email you sent. If you make a mistake, you can’t lean on a shared IP pool’s good behavior. So, if you’re sending volume is low or you’re new to email marketing, then you probably don’t need to spend more money a dedicated IP address…yet.

You may also want to go the shared route if your existing reputation happens to be low. The good reputations of other marketers in the pool will positively affect yours, since you are evaluated as a group rather than individually. Just remember, if you are the sole sender in a shared IP pool with a glowing sending reputation and another marketer in the shared pool performs poorly and violates best practices, any complaints could cause the IP address to be blocked. That could in turn negatively affect your email deliverability.

Lastly, remember to consider transactional emails. Transactional emails tend to be mission-critical. You must ensure they are delivered to the intended recipients. Sending transactional emails from the same IP address as your marketing emails might affect their deliverability – particularly if your company’s sending reputation is less than stellar. In that case, you might want to purchase a separate dedicated IP address for your transactional emails.

FP: Transactional emails seem to deserve special attention. Thanks for those recommendations. What would you advise, Colleen?

Colleen Petitt: This is one of the most common questions I hear from clients. 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, you’ll want to use the following criteria 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.

FP: Thank you, Colleen, Marco, and Robert for sharing your expertise with us today. The decision whether to use a dedicated or shared IP address clearly warrants careful consideration. There are pros and cons to each, as our panelists said. To reiterate Robert’s final point, deliverability is the crux of the issue. Engage in best practices to keep your list up to date and free of problematic email addresses – through regular hygiene scrubs and ECOA updates – and you can rest assured that your deliverability rates will be high. When deciding whether to use a shared or dedicated IP, maximizing deliverability should be the #1 goal of any email marketer.

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