Two of the main advantages that PPC has over other forms of advertising are transparency and control.
You can see exactly where you are advertising, and control the amount that you pay per conversion with great precision. If you know your conversion rate then you can adjust your cost per click to get any CPA that you want.
When advertisers use Google’s Display Network, it’s inevitable that many apply the same logic to it. They have a target CPA, they know the conversion rate, and so they set the bids accordingly.
But is this the right way to go about it? Many advertisers advertise using banner networks, and it appears that the psychology is very different outside the AdWords environment.