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Dedicated IP Address vs Shared IP Address - Which One Should You Use?

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bold textAn IP address can be an asset and a liability for the email marketing campaigns of your company. Since all the emails are transferred over the internet from an IP address, the reputation of this address determines whether your email would reach the recipient's mailbox, be dumped in a spam folder, or be not delivered at all. This is where the importance of IP addresses, shared or dedicated, comes in.

This guide will discuss what shared and dedicated IP addresses are, their differences, benefits, and deployment methods to help you choose the apt one for your email marketing needs.

Table of contents

What is an IP address?

An IP address (Internet Protocol address) is an identifier of all the devices such as laptops, mobile phones, etc., connected to a computer network. These network devices use Internet protocol or Transmission Control Protocol for communication. The IP address assigned to these devices consists of a numerical label such as "216.58.217.206".

The IP addresses are mapped to domain names using DNS (Domain Name System) that acts as a phone book directory for the worldwide web. When you type a domain name (say, google.com) into your address bar, a DNS query is generated by your ISP (Internet Service Providers) to request the results from the nameservers associated with that domain.

What are the two types of IP addresses?

The two main types of IP addresses based on duration are:

1. Permanent/static

It usually remains the same or permanent until the device is decommissioned. Also, if there's any network architecture change, this IP address can change. However, it's up to the ISPs to decide whether or not to assign a permanent IP address.

2. Temporary/dynamic

In this case, the IP address can change. Moreover, dynamic addresses can be assigned by the Dynamic Host Configuration Protocol (DHCP) servers if required.

What is the function of an IP address?

The IP address performs two main functions:

• Host/Network interface identification

It uniquely identifies every device connected to the internet and enables communication between computers or cell phones with websites and other such streaming services.

• Location addressing

It provides information regarding the host's location on the internet. It also specifies the route to reach the destination.

What's the importance of IP address in email marketing?

Every email is routed and sent through an IP address. Internet service providers (ISPs) assign a score to a sender's IP as per the quality of emails, the frequency of sent emails, size, and receivers' interaction. It is called the senders' reputation.

Your IP address's reputation influences email clients to decide if they will deliver your message to your subscribers' inbox or not. Therefore, as an email marketer, you must see that your IP address must have a spotless reputation to ensure good email deliverability.

Most internet service providers like Gmail or Yahoo have blacklists to prevent unsolicited emails. These lists consist of suspicious and malicious IP addresses. Henceforth, we can say that the IP address shows the credibility of your emails.

To improve your email deliverability, you have to maintain your IP reputation. So how do you do that? To answer this question you can read our guide: How Does Your IP Address Affect Your Email Deliverability?

Concerning usage there are two types of IP addresses - Shared IP and Dedicated IP address

Let's explore both to understand their characteristics, use, and cost.

Shared IP address

What is a shared IP address?

A shared IP address is the one that's shared or used by multiple senders to send emails. It is like working in a co-working space where other companies share your location. Since the IP or Sender's reputation depends on all the emails sent using the IP, other senders' behavior can positively and negatively impact your reputation.

How to get a shared IP address?

Various websites provide shared hosting services. Some of the top hosting websites are InMotion, HostGato, Bluehost, etc. You can go to their websites for more information and purchase the hosting plan that best suits your needs.

Cost of a shared IP address

Shared hosting is the cheapest option. Each hosting website has different pricing plans based on traffic, disk space, add-ons, subscription length, etc. The cost usually ranges from $2.49 to $15 per month.

Dedicated IP address

What is a dedicated IP address?

A dedicated IP address is used by only one sender. This means that only one participant or business can send emails from a dedicated IP address. The dedicated IP address allows you to control the IP reputation fully. Unlike in a shared IP address, your sender's reputation is just the function of your email practices and etiquettes. A dedicated IP (static) helps you avoid repetitive verification in the form of CAPTCHA, especially when you're using a VPN. In addition, it provides direct access to view and updates the website easily.

How to get a dedicated IP address?

Different hosting sites such as Bluehost, GoDaddy, etc. You can easily purchase a dedicated IP from the respective hosting site.

In case you are using GoDaddy, here's how you can get a dedicated IP from GoDaddy:

  • Go to your Account manager on the GoDaddy site.
  • Click on Hosting & Servers in the main navigation bar.
  • Select dedicated IP. Then, choose the length of the dedicated IP service accordingly.
  • Proceed to checkout
  • Upon completion, go to the web hosting area (in your account manager).
  • Apply for the credit that you bought.

Cost of dedicated IP address

Typically, a dedicated IP address costs more than a shared one. It may vary from a few dollars per month to over $100 per month. Some providers include a dedicated IP with high-performance plans or an add-on feature.

Shared IP or dedicated IP: which one should you use?

Now, we come to the most important question - Which one of the two IP addresses should you use?

Both the shared IP and dedicated IP have their pros and cons. So, let's analyze further to find the best scenarios to use each of the two.

Marketers can spike their email deliverability using other senders' reputations (since many users share the IP address). However, marketers may even have to face the consequences if a spammer or a participant with poor email practices shares the same IP address and has a bad domain reputation with the ISPs.

Related guide: 9 Reasons Why Your Emails Land in Spam and What You Can Do About It

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On the other hand, the dedicated IP address provides full reputation control to the sender. However, the data quality should be good for execution and further maintenance. One mistake can lower or even damage the whole reputation. Moreover, business websites should have SSL protection to request personal/payment information. But SSL certificates are issued to the (static) dedicated IP addresses only.

Below is a handy comparison of the features and benefits of shared and dedicated IP Addresses:

Shared IP address Dedicated IP address
No reputation control Full reputation control
No warm-up plans are required here Proper planning and execution are required. Strict warm-up plans have to be followed
The risk of damaging the sender's reputation is less The risk of damaging the sender's reputation is more
Less cost High cost
Difficult to detect any IP issue IP issues can be easily tracked and fixed
Consistency in email sending is not imperative Consistency is necessary concerning the schedule and volume of emails

Conclusion

Depending on your email campaign, you can use either a shared IP or a dedicated IP address depending upon your email campaign.

You should go for a dedicated IP address if you desire full reputation control and have at least over 100K volume of emails per year. Then, you can avoid the risks and avail yourself of maximum benefits in the long run. But, of course, you would still have to be careful about the reputation and consistency. If the cost is a major concern, you can initially opt for a shared IP address. And then later settle for the more reliable option of dedicated IP.

What you should do next

Hey there, thanks for reading till the end. Here are 3 ways we can help you grow your business:

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