I have been told by an SEO company to redirect the site IP to the domain using a 301 redirect. This will apparently improve the SEO ranking of the site. The site has a dedicated IP address.
Is this worth doing and should it be done ?
While its not bad advice from the SEO company I do feel its a little incomplete, there's a tag that you can use on your pages to avoid duplicates finding their way into the index of search engines such as Google.
The better advice from the SEO company would be to ensure that your using Rel Canonical on your pages so no pages ever end up in the index of search engines such as Google as duplicate, the redirecting from IP > Domain should be seen as a user experience attribute rather than a SEO stand point in this day and age since correct usage of Canonical pages its impossible to have duplicates in any indexes.
There's no harm in
Personally I don't bother and actually find it a plus 'NOT' to redirect IP to Domain since if a DNS server is down on a END user (Not your DNS, Their ISP) then they can still access your site using IP (Yes this is a small percentage and those with IT minds will be a small amount but if theirs no harm having your site access via IP whats the HARM? none...)
rel="canonical" helps more ways than one
Also the benefits of using Canonical extend further than just the IP issue it prevents duplicates in far many ways, it prevents non-www duplicates, non-sef urls, short urls, and many more.
Using the tag is very straight forward you tell Google and other search engines the master page of your site... So lets say you have a page that is accessible by these 8 ways:
Canonical should be different on each page
Please note this META tag is not a global set and you need to set it up differently on each page so for example if you have root, plus page1 and page2 then it'll look like so:
Canonical plugins for various CMS engines
If your using a Content Management System then this process is made easy since there will be more likely that someone has created a plugin/extension that will do the work for you (WordPress, Drupal and Joomla have many for eg.).
Read more about Canonical
I recommend you read more about rel="canonical":
That is a good idea and it certainly will not do any harm. What happens is that sometimes links are found with the IP address instead of the domain.
This causes contents to be found with two different address and, even if it figures out this is the same site, Google will not know which one to use. You can solves this with canonical tags in your webpages. In the worst case, it will look like duplicate content, although it is trivial to make the association.
Most importantly, search results will always show the domain name because Google uses the redirected address for a permanent redirect. This will look better in search results.
Personally, I would trust more a search result with a domain name than an IP as URL, simply because the latter looks unprofessional or unfinished.
If your website is shown at your IP address as well as the website name, then it is set up as the default host on your webserver. I recommend not using the default host to serve your website. As your SEO company suggests, you should redirect the default host to your website and serve your website as a "virtual host".
Here is an example of something that can go wrong when you serve your site as the default host: My website accepts anything infront of www.domain.com. The solution for you is the same: change your web server configuration to set your site as a virtual host rather than default host. This way you could choose what to do with the default host. For example you could redirect all those requests to your web site, or you could show an error message.