The ONE detailed guide on what proxies actually are and how they can be leveraged for business success

Curious to find out once and for all what a proxy is and how it can help bring your business value? This guide will help you understand which proxy type will provide your business with the best results
The ONE detailed guide on what proxies actually are and how they can be leveraged for business success
Amit Elia
Amit Elia | Control Panel Product Manager

In this article we will discuss:

What is a proxy?

To keep it simple a proxy is a connector. A good way to illustrate how it functions is a flight with a stopover. Say you are flying from California to Beijing with a stopover in Monaco. Whoever is picking you up in Beijing will see that your flight is landing from Monaco, essentially concealing your destination of origin (the US). Every computer has an IP which can be tracked, blocked, identified, and located geographically. What a proxy does is allow you to simultaneously be from everywhere and nowhere. 

By connecting to a server, and a global network of localized IPs, businesses can:

  • Verify ad backlink placements in Canberra
  • Implement a dynamic pricing strategy for ticket fares on a flight aggregator site by checking competitor rates in real-time
  • Ensure that third-party vendors are staying in-line with brand tone, voice and pricing while discovering illegal brand squatters

Proxies ensure that you are connecting from the correct geolocation, ensuring you don’t get blocked by rotating IP addresses in certain cases. In other instances, especially with more advanced proxy-based tools, this will also include browser/fingerprint rotation as well as automatic retry logic adapted to site architectures ensuring requests never get flagged or fed misleading information.   

Main purposes for using proxies 

The main reasons businesses opt to use a proxy can be summarized as follows:

  • Obtaining open-source web data which would otherwise be distorted/blocked by competing entities 
  • Increasing network security by shielding source IP addresses 
  • Increasing data collection performance by delivering data at quicker speeds while enabling increased concurrent requests 
  • Gaining access to user-generated data 
  • Managing/accessing/Quality Assuring geolocation sensitive campaigns/data/websites/programs. 

In this context, Bright Data’s proxy networks are available in 195 countries across the globe with laser-focused country, city, ASN, and mobile carrier targeting as well as 99.9% uptime. 

Some illustrative/concrete use cases currently being used by companies include:

  • Market research – Companies use proxies to validate their Unique Sales Proposition (USP), analyze the performance of competing entity’s localized products and services as well as identifying market needs/gaps. A data set that could be collected in this context might be social media sentiment regarding a weight loss program among a target audience of post-pregnancy mothers,  for example.
  • Investment intelligence – Portfolio managers and investment funds use proxies to correlate unique web data sets that give them an informational advantage, enabling them to be first in or out of a security. For example, correlating satellite data of supply-chain issues with open source  financial reports that can indicate higher than expected losses in the following financial quarter of a company in question. 
  • Digital retail optimization – Individual vendors, and marketplaces use proxies in order to understand real-time consumer demand and competitor activities in order to grab increased market share. Data points which help provide this type of value include consumer reviews, vendor star ratings, as well as listing Click-Through Rates (CTRs). 

Different types of proxies 

There is a large variety of proxy types, this confuses people. The first thing you need to know is that there are major differences between the various proxy network types – this includes how they are priced, what they can accomplish for you as well as how effectively they can do this based on your specific industry/use case. In the following section I will breakdown each and every proxy type so that you can make smarter business decisions:

Residential proxies

These are unique IP addresses that belong to real individuals located in different geolocations. 

Key Residential proxy benefits include being able to access sites with sophisticated site architectures using real users’ IPs. This ensures that competitive pricing, and marketing data, for example, are highly accurate. Also, Residential proxy network users can send unlimited concurrent requests without compromising their data collection speeds as requests can be routed through millions of peers. 

Residential is a good option for businesses in the AdTech, travel intelligence, and brand protection spaces as well as others. This is true as these use cases can significantly benefit from a geo-targeted user-first data collection approach. For example, dynamic flight pricing strategies based on consumer location, monitoring the correct use of a language in international marketing campaigns, and cross-border trademark squatting.  

Datacenter proxies

These are IPs that are located in Datacenters and not assigned to any individual person or business. These IPs are not affiliated with a specific Internet Service Provider (ISP) and they are batched for server processing. 

Key Datacenter benefits include IP consistency, precise geolocation targeting, as well as being one of the most cost-effective proxy options available. 

Data Center is a good option for businesses looking to target sites with simplistic site architecture and with no major blocking mechanisms based on robotic/nonhuman behaviors. 

ISP proxies 

These are proxies leased/bought from Internet Service Providers (ISPs) for commercial use. They are hosted by servers like Datacenter proxies but in contrast, are identified by target sites as having originated from ‘real places of residence’. 

Key ISP proxy benefits include enjoying a hybrid approach – On the one hand, using proxies routed through a Datacenter (increasing speed), while on the other hand having requests treated as if they had originated from a ‘real Residential IP’. 

ISP proxies are a good option for businesses looking to manage international retail promotion, investing, and geolocation-specific web data extraction. For example, a vendor with digital outlets in multiple geo-locations could greatly benefit from managing those Points of Sale (PoS) using ISP proxies. 

ISP / Datacenter proxies Vs. Residential proxies 

ISP, as well as Datacenter proxy networks, are further differentiated from Residential proxies in that they consist of static IPs, meaning that businesses that need to manage multiple accounts (such as for eCommerce sites, social networks, etc) can benefit from them by assigning an IP to each individual profile without the fear of getting blocked (for example, signing into the same account from different IPs can in some cases cause bans on certain target sites).

Also, Residential IPs are ‘rotating’, meaning it’s hard to ensure that the same IP will always be available if needed. This may happen as these are real peer IPs who are free to opt-in, and out of the proxy network at their own discretion. 

Mobile proxies

These are real 3G/4G cellular connections that belong to various people and carriers across the globe. This is the most expensive type of proxy network to use but it also can be extremely effective in certain instances. 

Key Mobile proxy benefits include performing mobile-first tasks from the comfort of a desktop [e.g. Quality Assurance (QA), and User Experience (UX) testing], as well as a unique capability of being able to keep competitor analyses and market research ‘below the surface’. Additionally, it offers businesses complete ASN, carrier, and mobile network targeting capabilities.

Mobile proxies are a good option for businesses looking to perform desktop-based mobile app testing, ad verification, app promotion/direct billing tracking. Mobile proxies are also especially effective when looking to obtain GPS-sensitive data. 

Proxy Vs. VPN: Main differences 

There are many ways to define the differences between the two. Here is what I have learned from my experience working with data collection clients:

VPNs are typically used for pinpointed/manual tasks such as a marketing agent checking out the final product of a campaign he or she has been working on in a foreign country. This could be a social media ad in Spain, a website in France, or a video on a Japanese streaming platform.

Proxies are more suited for higher volume data collection projects that require different geographies, easier scalability, as well as better scalability. For example, a company that wants to compare the pricing of their flights against dozens of major airlines and Online Travel Agencies (OTAs). 

Why would you need a proxy service?

First off, no one ‘needs’ anything.  A proxy service however can help streamline, and automate data collection processes helping shorten the ‘time from collection to insight’. 

Let’s break it down. Proxy services enhance the data collection process by:

  • Providing you with technology that enhances your proxy management techniques such as ‘waterfalling’ which means that a system decides which type of proxy to use for which task helping you save time and money 
  • Ensuring that you are only using ‘clean proxies’ that have not been tainted by previous malicious parties or competing entities that have ‘maxed out’ these proxies for your specific use case. For example, a competing eCommerce entity that has previously used a specific IP address to get pricing data from a marketplace so that IP has been flagged by the target site to feed misleading pricing data. 

The bottom line 

Using a proxy can be a powerful tool for businesses that want to be in touch with real-time consumer needs and competitor activities. Proxies can help you view data as an end-user would in any geolocation helping you make better decisions. Lastly, a proxy service can help facilitate your proxy needs by adding a layer of technology, security, and automation ensuring that you get accurate data in record time. 

Amit Elia
Amit Elia | Control Panel Product Manager

Amit is a Product Manager of Bright Data's Control Panel, and onboarding. With extensive knowledge of the company's products' inner workings, he has supported company-side developers in choosing proxy, and data collection solutions best suited and tailored to their organization's unique challenges, and goals.


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