Running a contest on Facebook is a powerful way to generate buzz, increase engagement, boost your fan count and build your email list. For several years, the contest rules were fairly loose and Facebook users and page admins could pretty much administer whatever campaigns they wished within the confines of Facebook’s general terms (now called Statement of Rights and Responsibilities). However, in 2009, Facebook severely tightened up their promotion guidelines, causing a great deal of confusion even two years later. So, anytime you run a campaign on Facebook where you wish to select a winner, that would fall into the terms of Facebook’s Promotions Guidelines. You will not administer a promotion through Facebook, except through an application on the Facebook Platform. A promotion where you select winners is not to be confused with you simply promoting and marketing your business—that’s exactly the reason Facebook (fan) pages were designed! In order to administer any kind of contest, you had to (1) get written approval from Facebook at least seven days prior to running your campaign, (2) have an account rep at Facebook and meet the minimum ad spend of $10,000 per month and (3) use a third-party app on the Facebook platform. You no longer need an account rep at Facebook, nor do you need to meet the minimum monthly ad spend. BUT you still must administer ALL contests on Facebook via a third-party app ON the Facebook platform.
A wide variety of third-party apps offer promotion services that meet Facebook’s rules.
UPDATE March 5, 2011: Two additional promotions app services to check out include Offerpop and PromoBoxx.
UPDATE March 14, 2011: Another promotions app to add to this list is Freepromos (currently 400k monthly active users!). What you can do, for example, is select a fan at random and feature him or her in your page photo.

You cannot: Condition entry in the promotion upon a user providing content on Facebook, such as posting on a wall of a page, uploading a photo, or posting a status update.
You can: Use a third-party application to condition entry to the promotion upon a user providing content to the application. I searched extensively for a Flickr Facebook app, for example, that might be a good workaround for running a contest, but came up blank. You CAN restrict your promotion only to entrants who have first liked your page, as long as the promotion is administered through a third-party app on a separate canvas page (now a link, formerly a tab).
See the Facebook page of 1-800-Flowers for a discount code, only revealed to users who like their page. If you are searching for a reliable web hosting company, or if you are new to web hosting, you have come to the right place. What is good about these web designs is that they are totally free and you may use them for your own projects at absolutely no cost. But Facebook has rigorous rules governing what campaigns you can and cannot administer and promote on their platform. It’s all about liability, and the Facebook promo guidelines are designed to distance the social network from whatever companies and bloggers do with their contests. I strongly recommend all Facebook page admins become very familiar with how to safely run contests within the rules.
Administration includes operation of any element of the promotion, such as collecting entries, conducting a drawing, judging entries, or notifying winners. Keep in mind the submission and voting is, of course, part of an official sanctioned promotion being run on a third-party app.
Photos, or any content, submitted for entry into a contest can only be done via a third-party app on the Facebook platform.

For example, you may administer a photo contest whereby a user uploads a photo to a third-party application to enter the contest.
You CAN provide a giveaway and even collect names and emails from fans and visitors to your page.
Check out Guy Kawasaki‘s Facebook page for his forthcoming book, Enchantment, where he gives away a free ebook just for liking his page.
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