I have been a sales professional for 12 years and have taken part and orchestrated in many sales contests. Some I have won and others I have bombed. The contests I've won usually included a form of public recognition that went outside the sales walls. For me, motivation and drive came from the satisfaction that I was helping the organization as a whole. After all sales = revenue = growth. Growth effects the entire organization not just the sales department. Being thanked for a job well done by a CFO, HR administrator or tech support person has a powerful effect on sales people. Sales people are all about pride and recognition more than gift cards and points. The point I am trying to drive home is to be sure you use public recognition as a component to your sales contest. Don't keep the sales contest results isolated to just the sales team.
In summary, I do believe sales contest work. The important thing to emphasize with any contest to act as a cheerleader for the participants. Send out daily emails to the team with the most updated scores. Send a company wide email congratulating sales reps who win sales contests and thank them for contributing the growth of your organization.