Does it matter to colleges whether you get 1st place or 2nd place in a competition? Does it majorly impact your application?
Depends on the competition. Second place in a national level competition is going to be looked at different than at your school level.
Yes, but only in one case. It is when the college has exactly one spot left for an acceptance. Two applicants have exactly the same profile (grades, test scores, classes, LOR’s, EC’s,etc) but one got first in a competition and the other took second.
What if the competition was a local one? Would it make a big difference?
If the competition was local and there were only two entrants, then probably best just to emphasize that you came in second.
If local with several dozen or more entrants, then worth mentioning but not likely to impact the admissions decision (although that really depends upon the specifics).
If the competition was in an unusual topic related to your intended area of study, then either first or second place is notable. An example might be a competition in Greek & Latin translations for a future classics major.
^bump
Why not just tell us what this competition is?
Some are insignificant, even if you win first place. In that case, adcoms can wonder why you even mention it.
You’ve asked a lot of questions about how to boost your apps. You’ve got to know enough about your targets to better understand what they do do look for.
You Have Won Second Prize In A Beauty Contest. Collect $10?