Challenge to monetize free Android apps… is it a challenge?

A recently published Distimo report states that “It is more challenging for developers in the Google Android Market than in the Apple App Store to monetize using a one-off fee monetization model.” Obviously, the reason for that is dominance of free apps on Android Market.

Of course, ad based apps are a well known way to monetize free apps, however there are some other indirect ways to gain profit…

1 – In-app purchases
App users are inclined to purchase more levels, currency or other bonuses within apps they’re already hooked on. Leading potential users into your app, free of charge delivers an opportunity to introduce in-app purchases to your users. Instead of determining a one off fee from the get go, develop an up-sell long term strategy by introducing more of what your users really want.

2 – Leveraging Free Apps for Paid Content
One of the most utilized marketing methods on the app store is the “Cross Promotion” strategy. Successful developers have learned that it’s much easier to have paid apps discovered and monetized, when there’s a network of free apps cross promoting it. A quick look at the top free apps on the android market shows a host of free apps such as flashlights, clocks, notepads and other basic apps, developed with the main goals of either generating revenue through ads or cross-promoting paid apps.

3 – Increased Download Rates
Free apps have the advantage of generating more than 10x times the downloads then a similar paid app priced over the $0.99 USD tier. For branded apps that are developed in the interested of increasing customer engagement, free apps open a channel of communication never before possible. So branded apps that are either useful to the company’s core audience or just entertaining enhance the company’s product and the company’s publicity.

4 – Generating and monetizing traffic to your website.
The idea is in the following. You should invite your user to visit your website (e.g. to view high scores, read info about application, etc.). Popular application can generate quite significant traffic to your website, where you can monetize the site itself.
Showing ads on a landing page is not the only thing you can do with a traffic. If you have products or services relevant to your Android application theme, you may want to try to sell it instead (or in addition) of showing ads. The idea here that you may drive your target audience to your web site via Android application.

Do you know any other ways to monetize Android free apps? If so, it would be really helpful to find out about them. Please, share your ideas with us!

Thank you so much!