In my experience songwriting contests connected with festivals can be very rewarding on a personal level. I have made some long term musical friends through the South Florida Folk Festival song contest.

Songwriting contests sponsered by guitar companies, record companies, etc. are an expensive waste of time. The categories are the first clue that they are not looking for what you are writing (unless you write Urban Contemporary Heavy Metal Hip Hop Gospel songs.) I would be very surprised if A&R people listen at all unless it's at gunpoint.