I have a very active forum (see first link in sig) but I would like to increase the traffic (especially since i just moved to a triple-server load-balanced setup and i would like to see higher levels of traffic without having to wait for the cyclical increases). I have some pretty nice prizes I can give away but I would like to design contests in such a way in order to get a good return on the cost of the prizes. Do any of you have experience with running worthwhile contests on forums and are there any tips that you can share?
I ran a contest on offtopic.com, a large community. It was a referral contest in order to get people to come to my site, signup etc. I got about 400 new people from that contest and the prizes were donated car stuff (relating to my site). There was a large increase in traffic during the time of the contest, but that immediately subsided at the end.
The only advice I can give is, be creative. The zanier the better, and the more likely to get attention.
In my opinion $$$ works the best if you can afford it. Although you may find that people will just enter for the chance to win and not bother coming back. Pehaps though you could get a company to donate prizes in exchange for advertising on the site that way you could give out a new prize every day/week/month. Forums are a tricky breed.