I am sure many people put a contest up thinking "now this will help bring people to my blog" or "this will spread the word about what I am selling" and it will... but most of the time this can be improved upon.
Get linked to. This can mean giving extra entries to those who blog about the contest and link to you. OR you can get linked up in a contest blog of some sort (they don't host the contest, they only blog about contests... just follow the links, you will see).
My favorite contest blogs are:
Etsy Giveaways : Etsy contest only
Wiknit : Knitting, crochet, or spinning related prizes only.
PRIZEY : From what I can tell they take ALL types of contests and are even equipped to help you by providing the legal mumbo jumbo needed... very nice! (I suggest you do pay up to get the legal help, at least the first time.)
Then there is Bloggy Giveaways and their VERY AWESOME carnival. I have done the carnival once and got over 600 hits in one day! Talk about crazy! It comes around every 3 months so plan ahead on this one.
I know there are more out there (just Google "contest blogs" and "contest directory" and see the many HUNDREDS there are!) but I am only linking to the ones I like the most (the ones that have products on them that I like and use...). So be smart about which directories are worth it for you and hit the demographics you want and would be interested in your product.
The fastest way to find ones that suit you, that I have found, is to find one or two that you like and then add them to Google Reader. Then look at your suggested reading.
Anyway, that Works for Me....