If you work with email marketing campaigns you no doubt heard about dedicated IP (internet protocol) addresses. Perhaps you have been wondering about who uses them and whether you should considering using one yourself. In this article, we explain what they are for and list some reasons for when it makes sense to use them.

IP (internet protocol) address is a unique address that identifies a device (computer or server) on the Internet or a local network. When you start using a hosted transactional or bulk email marketing service, by default, your emails are being sent from a group of servers with different IP addresses, and that group of servers is shared by multiple senders like you. So your emails use a “shared IP pool” and the reputation of those shared IP addresses is shared as well. The IP reputation is one of the factors that influences email deliverability and inbox placement.

About Shared IP Pools

Email service providers (ESPs) are responsible for managing (and protecting) the reputation of the IP addresses used by their platform. For that reason, many ESPs turn away customers if/when they determine that their use of the platform may negatively affect other customers. Some platforms (like Mailchimp) scan the email lists customers upload to automatically determine its quality and can suspend account or campaigns based on that data. Many providers have a manual campaign review step for all new customers, so it’s not even possible to send a bulk campaign as soon as you sign up. This type of customer filtering and platform protection by market leaders results in 2 things:

  1. Desired customer pool with high quality email sending practices
  2. Higher prices for the service, in return for better IP reputation

So when you use a market leader like MailChimp or ActiveCampaign, that cost up to x10 more than some of the lower cost providers, you pay for “good company” in addition to extra features (e.g. multivariate testing, landing pages, email template variety). However, the biggest factor in IP reputation is whether it’s blacklisted, which happens when emails sent from a given IP get flagged as “Spam” by the recipients. If the % of complaints is high enough, the IP gets blacklisted and may get blocked by ISPs. If the shared IP address  isn’t blacklisted, the quality of senders you share it with doesn’t make as big of a difference.

Does it mean that low cost email providers have lower quality IP pools than market leaders? Yes, it does. Does it mean all your emails will go to Spam folder? No. Not if all other email deliverability factors signal quality.

IP Reputation as an Email Deliverability Factor

Lets review the factors that affect deliverability, they are:

  1. IP reputation
  2. Sender reputation (e.g. sender being your domain or exact email address the emails are sent from)
  3. Server and domain configuration (DKIM, SPF, etc)
  4. Global engagement
  5. Content and format of the email (spam words in subject or message body, format – use of images, etc)
  6. Relative engagement for you (sender) versus other senders in the recipients inbox
email deliverability factors

Email deliverability factors

On the diagram above, the green box represents factors that vary and change more with each campaign sent and the square on the left with 4 factors are not subject to dramatic changes on a per campaign basis. So with IP address reputation being only 1 of several factors, it can be a deciding factor in inbox placement but it depends on the quality score of the other factors.

Who Benefits from a Dedicated IP?

So if you are a sender with established good reputation and high engagement history, and especially if you are sending low volumes of emails (less than 5,000 per day), you have a low risk of being affected by a switch of ESP from a market leader to a lower cost provider. However, getting a dedicated IP address can help ensure your ongoing high deliverability in the future, when mailbox providers adjust their inbox placement algorithms.

If you are a high volume sender (send more than 10,000 emails per day) and perhaps have been experiencing deliverability issues with your current provider, switching ISPs might not give you an instant improvement unless you change some of the factors as well – improve list quality by removing invalid addresses, properly configure your domain for sending emails, invest in testing your email templates.

You can benefit from a dedicated IP address IF:

  • You are looking for a fresh start and looking to invest in building a strong email sender reputation
  • You have a small list now, but plan to grow it fast and monetize it, while controlling cost and ROI by using a low cost provider
  • You have built up a sizable list (over 20,000 subscribers) and ready to engage it with high quality content

Unfortunately, low volume senders are limited in their options because most ESPs don’t offer an option to get a dedicated IP address on lower pricing tiers. And if you use an ESP that does offer access to a dedicated IP, it may come with a hefty price tag (for example $59 per IP per month at MailGun). If you use an ESP that runs on Amazon SES, like BigMailer, you can request a dedicated IP(s) from Amazon anytime, at a cost of $25 per IP per month. Check out our comparison of bulk email marketing services to see how different providers accommodate use of a dedicated IP address.

If you are curious, yes we use a dedicated IP at BigMailer, and our total list engagement is at 70% with typical open rates on weekly campaigns in the 30-60% range. More importantly, we have seen open rates for gmail (very hard to place into inbox), as high as 80%.

Have you recently switched ESP and experienced a big change in inbox placement? Share your experience in the comments or via live chat. If you are a BigMailer customer we would love to use your story for a case study.

Happy email marketing.