This is absolutely blatant vanity-ism. Dick had the good sense to tell people that it's common practice in paperback books. For other publishers.
PA authors -this is the most ridiculous thing I've ever heard. I HAVE paid for advertising - but I'll tell you that it was with a group of other genre authors for a 2 page full color spread in a glossy genre magazine. It was fairly inexpensive, and will be viewed by thousands of people likely to like and/or purchase my book.
What PA is proposing is done FOR FREE by most other publishers. As I indicated previously, my publisher already does this, and I DON'T PAY FOR IT. Why? Because those publishers want readers to buy other books from them. Think, for a moment, why PA is asking you for MONEY to do what other publishers do FOR FREE???? How many people will POSSIBLY see the ad? Considering how many copies the average PA book sells, way fewer than my genre mag ad. Ask yourself how much you think that space at the back of the book is worth, in a PA book that very few people will read. They may PRINT the ad in 10,000 books, but I would like to know how many of that 10,000 actually find their way into reader's hands.
Save your money, get together with other PA authors, and buy an ad in a magazine, if you really want print advertising. You'll reach more people that you don't know.