The basic premise is that pixels (the primary unit that makes up a graphic on a website) are made available on a web page. These pixels display graphics that link back to the advertiser's website. The page becomes a mosaic that can often equal the best pop culture art. The outcome is a web page that gets qualified traffic with a link back to their site, this in turn causes sales which, in anyone's book, is the name of the game.
The reasoning behind this new medium is the idea that PPC advertising costs too much. Ten PPC clicks per day at 50 cents per click works out at $1825 per annum. Often pay per click costs a great deal more than this depending, obviously, on the competition.
Pixel adverts are usually a single cost and are valid for years. It is not uncommon to see pixel site owners providing their space for 5 years. With a good quality graphic, it could attract more visitors to your website than pay per click advertising resulting in big savings. Spaces are most commonly sold in 10 by 10 pixel blocks at 5 cents per pixel up to over a dollar a pixel. A 10 by 10 block comprises 100 pixels. The 10px by 10px minimum format is usually the norm as this is logically the smallest functional space. Blocks of pixels generally have to form a square or a rectangle.
Pixel advertising is just in it's infancy. It is much too early to tell where it may lead, but for what they cost, the pixel ads tend to be most likely money well spent. Overall, it's likely to be a small price to pay and could benefit site owners with a good collection of inbound links.