Why do companies run competitions?

[charliee]

I know there may be some obvious answers to this question: To increase brand awareness, gather info on customer demograph, etc. However I would really like to know what others think companies could gain from running a competition, and really get an idea of everything that an organisation could take advantage of.

So, why do you think companies run competitions? What can be gained?

[Mega B]

Its simple if you offer a free competition for say a IPhone or something like that on your site you stand to gain alot of attraction to the site for that reason hence as you have mentioned they can then gather 'vital information' and then you can use that information to gain potential further sales and i guess it must work other wise they would not do it.I would thing you could call its a 'carrot dangler' people just like the attraction of free competitions.

[noob]

In addition to Mega B's comment, there are companies out there willing to do competitions to test skills of the competitors that could be a way to recruit talent base on results of the competition. In other cases, companies have a lot to gain for running a competition because it adds to their bottom line (examples include Facebook and Apple for their App markets; Google as well).