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Dedicated IPs: A Double-Edged Sword for Small Businesses

by James Thompson

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Lately, we received questions from customers and email marketing industry insiders about our position on dedicated IPs for sending email. For a few years now, we’ve discontinued offering dedicated IPs to users. We’ve created an email environment of shared IPs that support the email marketing needs for thousands of small businesses.

Here is an inside look at why our shared IP environment is one that you can count on to get emails to the inbox reliably.

Currently, we send nearly 80 million emails weekly. To keep pace with our accelerated growth and to ensure high email deliverability, we have invested a lot into developing our infrastructure so it serves over 44,000 small business users.

When someone talks about sending email from a dedicated IP, it usually means that their email traffic is routed only through a single IP address. I’ll presume that you already have a good understanding of what an IP address is and how it works in relation to sending email, but if not, here’s an overview from Wikipedia.

A dedicated IP often has one customer or company that solely routes their own email traffic through it. A shared IP is typically used by a larger group of senders, in an effort to pool resources and email reputations together. On paper, a dedicated IP sounds better, but it may not be ideal for typical small businesses.

The most common reason I hear for having a dedicated IP from users is the assumption that you don’t have to worry about someone else’s poor marketing habits negatively affecting you. False. While that was true years ago, this isn’t nearly as valid today.

Small businesses are usually impacted the most by anti-spam enforcement.Containing the impact from unintended email abuse has evolved.

Many years ago, systems administrators who manage inbound email servers became smart about preventing spam. They realized that it’s relatively easy for spammers to simply burn an IP address with spam, then move to a different IP address and resume their illicit activities through that. And once that IP was blacklisted, they would move to another. Rinse and repeat. Eventually, these system admins realized that these abused IPs resolved back to similar domains, as well as the ranges themselves are usually owned by a single hosting service, company or email service provider.  Instead of just blocking each IP they see abuse from, a system admin can simply block every IP in a given range from sending mail to their network. This is a profound change because now you can no longer be exclusive, despite your intentions, if you have a dedicated IP.  If a neighboring IP, one that you don’t own, is abusive, your IP can be impacted as well if the recipient decides to blacklist the entire range of your IP addresses.

This isn’t hypothetical. We’ve seen this ourselves.

Three years ago, we saw this very same thing happen with a small subset range of dedicated IPs we had allocated for a handful of customers. A major hosting service decided to blacklist a range of IPs because of one customer’s poor marketing choices, which in turn spilled over to completely innocent neighboring IP addresses. As you can imagine, this was quite painful for those neighbors.

Maintaining a strong email volume consistently builds the reputation of email senders.

Most small businesses cannot sustain consistent and predictable email volumes to maintain a positive email reputation. So what does that mean? It means that email servers looks for spikes in mail traffic volumes coming from a single IP address. This is an indicator that an IP may have been compromised or a spammer is likely “blasting” out of the IP before it gets shut down. If you are a small business that sends once a month to your entire list, and maybe the few sporadic sends in between, you can easily be viewed as a compromised IP address and get blacklisted or throttled accordingly, even if you aren’t a spammer.

Small mistakes become costly with dedicated IPs.Mistakes are much tougher to correct in a dedicated IP environment.

The last issue we have seen with dedicated IPs is that an email marketing mistake is much more costly to the sender in the long run. When you send from shared IP addresses, you cumulatively pool email volumes and reputations. Due to the simple fact that there is generally more email volume sending through shared IPs, an erroneous email broadcast that went to the wrong segment at the wrong time, will be a much smaller blip on the receiver’s radar because the overall volume of good emails from that same shared IP offsets that small mistake. A responsible email service provider (like Infusionsoft) will actually monitor for these email mistakes and educate senders to make sure the mistake is not repeated in the future. To protect the reputation of the all emails sent through shared IP addresses, we strongly enforce our Acceptable Use Policy while being helpful, kind and respectful to users who unintentionally make mistakes with their email marketing program.

This unfortunately cannot be said for a dedicated IP. Since the volume is much lower, the same kind of mistake can cause long-term reputation damage, which can then cause the receiving ESP to take permanent measures to prevent emails from the offending IP.

Dedicated IPs work well when you have the need and the resources to maintain it.

Of course, this is a general rule and observation. There are exceptions to the rule for dedicated IP senders.  We host services for several customers with dedicated IPs  – which we no longer offer — who generate consistently good deliverability. However, we have also seen things go south for some small businesses using a dedicated IP address, because of a single mistake they were labeled as a spam source. In fact, we’ve seen this happen a lot.

The underlying factor here is that the successful customers who use a dedicated IP are usually very mature in their business operations and marketing approach. These companies have a lot of experience with email marketing and compliance. They also usually have a small team dedicated just to this part of the business, who is knowledgeable about email compliance and who has the know-how and experience to quickly and appropriately respond to abuse situations.

Managing Email Reputation is a Full-Time Job

Small businesses: ‘Ain’t got no time for that.’

For most small businesses, nearly all Infusionsoft users, they don’t have the time or staff to properly manage the duties in maintaining a dedicated IP. (Trust me, it’s not as glorious as it sounds.) This is why most small businesses choose to choose a trustworthy email marketing service to send email to their customers and prospects. If you’re looking to send from a dedicated IP, be sure to discuss these topics with your ESP. As with most things in life, there is no magic bullet for deliverability.

To recap, dedicated IPs are beneficial for senders with massive email volumes and staff who can exclusively manage email servers. For Infusionsoft users, we will do our part of ensuring their messages are sent promptly, reliably and easily. As long as you respect the needs of your audience and observe email marketing best practices, you’ll get your messages to the inbox quickly.

I hope this clears the air about why we don’t offer dedicated IPs for customers. We want small businesses to succeed, not only the select few.

Photo Credit: (vhmh); Stuck in Customs;Bristol Motor Speedway & Dragway; Keoki Seu

  • http://twitter.com/Vekony Atilla Vekony

    Thanks, James, for explaining it simply. The last thing we small-business people want to worry about is managing our own dedicated IPs…

  • Mike Weiss

    Great article and I agree with your conclusion. Most small businesses do not mail often enough to worry about small increases in deliverability. Fixing holes in funnels and optimizing conversion by testing will provide huge increases in sales that trump the deliverability concerns. I have a $197 video training course that is temporarily free that helps small business grown their sales by increasing conversions. http://www.internetsalesexperts.net

  • http://twitter.com/danforsyth Dan Forsyth

    Really great explanation. Thank you!

  • http://www.facebook.com/ChristinaWagnerFriends Christina Wagner

    Thank you! I have a greater understanding now.

  • http://twitter.com/JonathanDrake Jonathan Drake

    It would of been helpful to explain the difference of the ip’s that Infusionsoft uses. Transactional. Single Optin. Double Optin. This strategy is not clear to those who have brought a list to infusionsoft or well explained on the on boarding process. Bringing a list over to infusionsoft and having to double optin even if they are customers and already double opted in from a previous list makes no sense. The ability to move to the better and more trusted IP you offer after showing good practices without having to double optin again would make more sense. A sandbox of sort that is employed by other email companies. Also would like the ability to see into the stats of the ip range from an independent source.

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