Make sure that contestants must visit the site to register to win. The response will be tremendous. Properly promoted a station could give away 10 or so CD's a week and enjoy many thousands of hits on their website from all over. Links to and from broadcast, music, artists, and radio related sites are important. If you offer viewers a playlist, make sure it's current.
Many stations also offer web surfers free screensavers and desktop wallpaper.
The cost is low and it is like money in the bank. Domain hosting will run about 30 to 50 dollars a month depending on how much space and additional services you need. The point is that getting on the net is easily affordable even for small stations. Quite a few small stations get on the net as a sub directory of someone elses domain, which they probably get free or at a very low cost. The many possibilities that the Internet provide are incredible.