On one hand, a contest only appears cool to the blog’s visitors only if the prize is exciting enough, and on the other hand an exciting prize could be anything and it may cost you an arm and a leg for nothing. It is imperative, therefore, to careful weigh the importance of contest vis-à-vis the prize you are offering and your budget before you finalize which prize to offer. Before going ahead with any prize, you should think about the following things:
No matter what your marketing objective is, and what the contest will deliver to you, you cannot offer something as a prize which you cannot afford as a business. You need to keep the complete picture in your mind before going with a prize.
Immediate Marketing leverage you are getting
You may afford to give an iPad in a retweet contest, but is it worth it? You need to ask this question before pulling your wallet out to pay for the prize. Will you get enough mileage from the contest you are hosting to justify the cost of prize you are giving?
Long-term benefit of running a contest
The end objective of your prize may not be to gain short-term benefit, or you may or may not get a substantial short-term benefit. The contest is still worth running if it gives you a long-term benefit. It is the long-term benefit that matters in the long run. You should focus on the long-term benefit of a contest as well, when deciding on the prize you are offering.
You need to run your prize idea through these before deciding on a prize to offer. You will not like to spend a handful of dollars for nothing. Do not get carried away by a excitement of running a contest and offering a cool prize while designing a contest. It will cost dearly.