I turned off WiFi on mine because I was too annoyed by ads.

Where do they show up? Never seen one.

An ad replaces the "screen saver" when you unlock the device (until you swipe it away), and there's a small banner at the bottom of the book list in the main menu. You probably bought a more expensive version with no ads. They can also be removed later for a small fee, or you can simply never enable wi-fi and there will be no ads at all.

There's a specific, cheaper version (10 euros cheaper in France) that has ads in.