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

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Shared IP vs Dedicated IP

An IP address can be an asset as well as a liability with respect to 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 simply be not delivered at all. This is where the importance of IP addresses, shared or dedicated, comes in.

In this article, we will discuss what shared & dedicated IP Addresses are, their differences, benefits, and deployment methods to help you to choose the apt one for your business.

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 to request the results from the nameservers associated with that domain.

The two main types of IP addresses are:

Permanent/static:

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

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 on the internet and enables communication between the 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.

The importance of IP address in email marketing

Every email is routed and sent through an IP address. 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.

The reputation of your IP address decides whether your message will be delivered to your subscribers' inbox or not. As an email marketer, you must see that your IP address must have a spotless reputation so as 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. In order to improve your email deliverability, you have to maintain your IP reputation. So how do you do that? Well, to understand this we need to understand what kind of IP address you have.

With respect to usage, there are two kinds of IP addresses- A shared IP address and a Dedicated IP address. Let’s explore both to understand their characteristics, use, and cost.

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 your location will be shared by other companies. Since the IP or Sender’s reputation depends on all the emails sent using the IP, here, other senders’ behavior can have a positive as well as a negative impact on your reputation.

How to get a shared IP address?

There are various websites that 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 Shared IP address

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

What is a dedicated IP address?

A dedicated IP address is used by only one sender. What this means is that only one participant or business can send emails from a dedicated IP address. The dedicated IP address allows you to have full control over the IP reputation. 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 to avoid repetitive verification in the form of CAPTCHA especially when you’re using a VPN. It provides direct access to view and updates the website easily.

How to get a dedicated IP address?

There are 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 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 as 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?

Clearly, both the Shared IP and Dedicated IP both have their own pros and cons. So, let's analyze further to find the best scenarios to use each of the two.

In the shared IP addresses, marketers can spike their email deliverability using other senders’ reputations (since the IP address is shared by many users). However, marketers may even have to face consequences in case a spammer or a participant with poor email practices is sharing the same IP address and has a bad domain reputation with the ISPs.

On the other hand, the dedicated IP address provides full reputation control to the sender. However, the data quality should be really good here for the overall 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 addressDedicated IP address
No reputation controlFull reputation control
No warm-up plans are required hereProper planning and execution are required. Strict warm-up plans have to be followed
The risk of damaging the sender’s reputation is lessThe risk of damaging the sender’s reputation is more
Less costHigh cost
Difficult to detect any IP issueIP issues can be easily tracked and fixed
Consistency in email sending is not imperativeConsistency is necessary with respect to the schedule and volume of emails

Conclusion

You can use either Shared IP or Dedicated IP address depending upon the needs and requirements of the business.

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

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