Shared IP vs. Dedicated IP Dilemma: What's the Best Choice?

Shared IP vs. Dedicated IP Dilemma: What's the Best Choice?

Author
Vladyslav Podoliako
Published
May 08, 2023
Reading duration
10 min

"Quick, they are hacking our IP!" and the fingers of the main hero are rushing over the keyboard to change the IP and save the world. 

While this sounds like one of the most relatable scenes from a Hollywood movie, Internet Protocols (IPs) stand for entirely different notions.

Every effective and profit-oriented email campaign heavily relies on a trusted IP. Here's why:

  • Sender reputation stake: IP reputation is a critical component of a trustworthy sender reputation. Internet service providers keep an open eye for suspicious IP address activity.
  • Email deliverability: Emails sent from an IP address that raises questions rarely target users' primary inboxes. They go to the spam folder instead.
  • Network security: professional IP configurations will protect sensitive data from unauthorized access and potential cyber-attacks.
  • Scalability: as you grow your sending volumes, a well-chosen IP address will ensure that all emails reach their intended recipients.
  • Cost-effectiveness: by choosing the correct IP, you can tune your campaign's budget so that you don't overspend on perks of little to no use.

Considering that a correctly chosen IP is a critical component of every campaign, Folderly experts offer this detailed yet straightforward dedicated IP vs. shared IP guide to your attention!

FYI: We’ve tried to ensure the guide answers all every question you might have regarding IP (and beyond, with insightful comparison charts).

The Article Walkthrough:

What Are Shared IP and Dedicated IP Addresses and How They Work

Now, let's have a closer look at what each IP address type stands for and how it works.

Shared IP

The shared IP address meaning is quite literal, as the name states. A number of users, websites, or organizations share the IP. Basically, email senders' emails are gathered and sent through the same IP.

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Should you decide to learn how a shared IP works on a more technical level, the process is as follows:

  • The message is directed at the receiving server.
  • The receiving server checks the IP's reputation to determine what to do with the email.
  • The higher the reputation is, the better the chances of avoiding the spam folder and getting into the primary inbox.
  • In case one of the IP's users raises suspicion, an ESP will put all the senders under investigation.

A shared IP address example:

Two websites, aka Folderly.com and Folderly.uk, share the same IP address, 123.123.12.2.

Note! Sharing the same IP does not necessarily mean that the two platforms share the same hosting, but in most cases, they do.

Dedicated IP

Unlike shared IPs, a dedicated IP server is associated with a single user, website, or corporation. Mainly, the variant is used by senders interested in large sending volumes, but exceptions happen.

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Note! Dedicated IP servers can only be used by senders who send more than 3000 emails a day, three times a week.

The work process of a dedicated IP is the same as that of a shared one – until a receiving server ensures your positive IP reputation, it won't direct your emails into the users' primary folder.

Example of a dedicated IP:

Let's say you run a website Folderly.com that's one of a kind, and its IP is 123.123.12.3. The IP address is private because no one else can access the same IP. Thus, it's referred to as dedicated.

Now, let’s review each different criteria and how they work in terms of both shared IP and dedicated IP.

Sender Reputation: Shared IP vs Dedicated IP

Sender Reputation

Affected by other users

Forgiving mistakes

Shared IP

Dedicated IP

It's been mentioned that your IP reputation will have its toll on the email sender reputation. However, both shared, and dedicated IPs will affect it slightly differently. Sometimes an obvious downside may turn out to be an unexpected benefit, so you should be well aware of what to look for.

Dedicated IP

There's both good news and bad news. Let’s start with the good one.

One of the most vital perks of acquiring a dedicated IP is the fact that no one but you will influence your sender rep scores. The stakes are solely in your hands, and it takes a double-check on the potential advantage. All because it takes a serious approach to email deliverability to keep your reputation up, and this is where you might need the help of email deliverability consultants.

The bad news, ironically, is the same—the stakes are solely in your hands. If it turns out you ask yourself, "Why do my emails go to spam? the chances are that you are the one who missed some important email deliverability components. And that’s why if you lack the expertise or don’t use a dedicated approach to fixing your email deliverability, you may land on a blacklist before you even spot the problem. A dedicated IP is not forgiving and you can't offer your trustworthy companions to share their flawless reputation. This is the dedicated IP policy.

Shared IP

As opposed to a dedicated IP for sending emails, your sender reputation with a shared IP is susceptible to other users' sending behavior. Most people consider it an undesirable risk, since a potential spammer may ruin your cold email campaign. However, there's another side to the coin, too.

Senders with good sender reputations will promote your campaign without you putting much effort into securing a speckless reputation. But how do you figure out who's on your shared IP team? The answer to that will lie encoded in the ESP's client policy.

An ESP that takes a serious approach to the client base will filter out the most suspicious sources, so you don't have to worry about it. You'll feel the high-security pressure when creating an account with such a provider. The more meticulous the sign-up process, the better.

On the matter of making mistakes, a shared IP is more forgiving than a dedicated one. Since an IP deals with high sending loads, individual mistakes aren't easily noticed, so you won't be added to IP address blacklist on the spot. As long as your partners keep the IP pool's reputation up, your deliverability scores won't suffer.

Maintenance Costs: Shared IP vs Dedicated IP

Maintenance & Cost

Expensive

Difficult to manage

Shared IP

Dedicated IP

FYI: Each company's goals & marketing strategies vary, so don't let cost alone sway your IP decision. Consider it, but remember there's more to the story. 

Dedicated IP

Here's the deal: dedicated email servers cost more than shared ones since you're the big boss. Prices may reach $100-$250, but not every start-up can afford it. As your business grows, you'll need more IPs and cough up extra cash. With IPv4 exhaustion, prices keep rising. Plus, being the sole user means taking on maintenance (which may get quite technical and require additional specialists involved)—so get ready for some technical work!

Shared IP

Shared IPs are the go-to option for budget-conscious folks. By sharing the same IP with multiple users, everyone gets to split the overall price, making it more affordable. It's an unbeatable advantage for those watching their wallets. Plus, shared hosting services offer feature-packed shared IP packages, adding extra value to your marketing game.

But that's not all! Sharing an IP with like-minded users helps address IPv4 exhaustion. While it may not feel like a personal triumph, it's a small win for the greater good. As for maintenance, shared IP platforms have your back. They handle any issues that crop up, so you can focus on growing your business—no need to stress if you're short on technical staff.

So, with shared IPs, you get a cost-effective solution, nifty add-ons, a greener choice, and hassle-free maintenance. It sounds like a pretty sweet deal! 

BTW, do not hurry with your decision yet, we have some more important factors to discuss. 

Warming Up Domain Efforts: Shared IP vs Dedicated IP

Requires warming up

Shared IP

Dedicated IP

You're right, your sender reputation is crucial for landing in users' inboxes. Having no sender score is just as bad as a poor one. So, let's dive deeper into which IP type might lead to this unfavorable outcome and how to avoid it, shall we?

Dedicated IP

With a dedicated IP, your sender score starts squeaky clean. But beware, ESPs are cautious of new addresses, so warming up your IP is essential. The warm-up process means gradually increasing email volume, not ideal for immediate mass campaigns. On the plus side, you control your own destiny, with no one to spoil your IP maintenance hard work.

On the bright side, starting from square one means that no one will get in your way, spoiling the results of your dedicated and meticulous work.

Shared IP

Opting for a shared IP? No need to warm up—you're ready for mass send-outs from the get-go! Previous users have already established a solid sender reputation, so you can enjoy the benefits without the initial legwork.

Security: Shared IP vs. Dedicated IP

Security level

Shared IP

Standard

Dedicated IP

Enhanced

Did you know a staggering 83% of global organizations face phishing attacks yearly? And about 90% of email users struggle to differentiate legit emails from clever phishing attempts. This brings us to IP security: which option offers the best safety?

Dedicated IP

In the past, only dedicated IPs could get a Secure Socket Layer (SSL certificate) for websites. While that's changed, dedicated IPs still offer greater control over email security. How? With a dedicated IP, the risk of blacklisting reduces since you're the sole user—no malicious intent, no ISP block. If trouble arises, you can quickly identify and resolve it.

Additionally, dedicated IPs let you easily monitor your remote team. Spot a security breach? Trace it to the source and take action.

Shared IP

While dedicated IPs may seem safer, shared IPs can be secure too. With SSL certificates now available for shared IPs, it's all about choosing a trustworthy hosting service.

They'll monitor users and ensure no one jeopardizes the IP reputation. However, one bad apple could still put everyone at risk, so choose your hosting service wisely.

Sending Volumes: Shared IP vs. Dedicated IP

Sending volumes

Shared IP

<300K emails/month

Dedicated IP

>300K emails/month

When choosing between dedicated and shared IPs, consider not only cost, security, and warm-up needs but also sending volumes. Your decision could hinge on this factor.

Dedicated IP

Perfect to send bulk email (think 300K+ emails/month), dedicated IPs are ideal for sales or email marketing pros. However, inconsistent or low-volume traffic (like 200 emails/week) can hurt your sender score, affecting deliverability.

Shared IP

While shared IPs can technically handle high sending volumes, success hinges on other users' send-out schedules, making deliverability unpredictable. So, if you're an occasional, low-volume sender, shared IPs are a safer bet to maintain good email deliverability rate.

Choose wisely! 

What Is the Best Option: Flowchart

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When It's Better to Use a Shared IP Address

Folderly email deliverability experts advise that you stick to a shared IP if:

  1. Your start-up budget is limited: shared IPs are easier to afford.
  2. Your sending volumes are low or inconsistent: you don't have to work on your sender rep and warm up the IP when you plan occasional and low-volume sending campaigns.
  3. Your sending partners are reliable: sharing the same sender score is beneficial only if you are 100% sure your fellow senders are trustworthy and legitimate.

 When It's Better to Use a Dedicated IP Address

Considering all dedicated IP addresses' benefits, let's round up the primary cases when to opt for the solution:

  1. Your sending volumes are high and consistent: it's possible to establish excellent sender scores on your own with high-volume email campaigns. However, a previous IP address warm-up is a must, and you should be ready for that.
  2. You don't trust fellow senders: recovering from a bad IP rep is challenging and time-consuming. You can avoid the outcome altogether, sticking to a dedicated IP.
  3. You have the means to afford the service: dedicated IPs are costlier than shared ones, but should you be able to afford the service, it will pay off in no time.

Summing Up: There's No One-Size-Fits-All

Both dedicated and shared IPs have their pros and cons, depending on your situation. Now equipped with the facts (and comparison chart), choosing the right IP becomes a manageable task on your to-do list.

Small businesses often opt for shared IPs—perfect for those just starting their email marketing journey. On the other hand, large corporations and ambitious salespeople benefit from dedicated IPs, with a keen target audience at their fingertips.

Remember, make informed decisions based on thorough research and clear goals. And when in doubt, a dedicated email deliverability consultant from the Folderly team will ensure you make the best choice for your needs!

To wrap things up with a laugh, we wanted to add a really fun meme, but couldn’t make one up. So here’s a joke straight from ChatGPT—brace yourself for some IP humor, and enjoy!

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Keep an eye on your IP and domain reputation in real-time to catch any issues like blacklisting before they harm your sender reputation.
Shared IP vs. Dedicated IP Dilemma: What's the Best Choice?
Vladyslav Podoliako
Author:
Vladyslav Podoliako
Founder & CEO
Vlad is a Founder & CEO of Belkins and Folderly, a series entrepreneur and investor with over ten years of management expertise in companies with 100 million evaluation. Vlad has years of experience building and growing service companies and SaaS startups in SalesTech and MarTech. He is skilled in creating successful businesses from the ground up and building top-notch teams that drive all ventures to the top of their industries.

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Keep an eye on your IP and domain reputation in real-time to catch any issues like blacklisting before they harm your sender reputation.