I'm thinking of throwing a contest over at new forum [Beyond Discussions], and If I do end up going through with the contest, it'll be huge. So I just want to know, are contests effective? Do the participants actually stay after the contest or do they just leave? I'm hoping to build a active community not just bunch of people looking for quick, easy money.
Contests are only going to be effective if you can market them to attract a larger audience. It's pointless if you're only get to get a handful of active users. So you'll have to calculate the cost versus the effectiveness. You should consider a broader marketing strategy not just contests.
It has been observed, that people usually leave the forum once the contest is over and at the end of the day you are left with some good number of posts and member count but very few active members in the forum.
From my experiences, only a couple of new participants actually stay after a contest has ended but it can help temporarily boost activity at the very least. However, I'd avoid giving away any major expensive prizes for the time being until you get more activity unless you can afford to do so and are confident that you'll get A LOT of participants to justify the cost as it will also look bad if you decide to keep extending the deadline if you're not satisfied with the current amount of participation...
Contest are only effective if you have a way to market them. Meaning, unless you already have a massive member base, your going to need to promote the contest on other sites, ask bloggers to make post about the contest, buy some advertising,,,,, stuff like that. And then, the prizes have to be worth peoples time. If its a $20 prize, dont expect much from it. The one thing you do not want people to say is "that is not worth my time."
Im having a $100 posting contest that has been up for a while, it doesn't seem to be working. But also, I haven't been advertising it that much because I have no time away from work.
Contests in general are good but it seems like you're just looking for a recruiting spree which is quite different.
Contest may bring traffic and members but they are for short period, now its your work to make them invole in forum activities