Using contests as a way of promotion

[supernatural_247]

I am considering running a contest with the following format/prizes:

Year-Long Contest and Drawing:

- Contest: Laptop or $1500 (for those who refer the most friends to me)
- Drawing: Laptop or $1500 (one entry for every 5 friends referred. Emails are verified)


Monthly Contest and Drawing

- Contest: $100, $75, $50 (same format as yearly)
- Drawing: $100, $75, $50 (same format as yearly)


I would love any suggestions, reworkings, etc... that you have to offer!

[JKomp]

while i was working at www.totalwebtalk.com as a paid mod we ran a couple of contests, some worked better than others. I think that it is important to make sure people are aware of the contest, you cant just launch the contest on your own site and expect people to find out about it.
The most successful comp we held was a logo design competition.

[supernatural_247]

I think that it is important to make sure people are aware of the contest, you cant just launch the contest on your own site and expect people to find out about it.

Well, when the person who is referred comes to the site, they too would see the ad for the contest (which would be quite visible). Of course, I would do additional outside promoting as well... what i'm trying to get at is do you think that the "referral contest" itself could be a major source of traffic?