I will try my best to answer your questions. These are not finite answers, just some personal opinion.
1] He tested all the tier 1 PPC network, and found the only valuable source to be Adwords
It all really depends on how he approached the testing. There is more than one way to test something, particularly with PPC. If one method doesn't work doesn't mean that it's all junked. The same applies with different "tier 1" networks. Yahoo and MSN can bring in quite a bit of traffic too assuming you're doing things correctly.
2] He doesn't even wanna try to get traffic from tier 2/3 networks(miva, searchfeed...)
Without proper testing, he potentially could be killing off good traffic with these. If he is willing to reconsider, there is a Ask.com coupon code for $50 free credit available for him to test with. Coupon expires in 10 days on 04/20/2008. Code is SESNY08.
For additional help, please refer to this recent guest post made by CDF on John Chow about 2nd Tier PPC Testing.
3] He set his budget to the limit (let's say 20k$/day), but google doesnt make him spend more than 10k/day.
Depending on his target keywords, text ads, etc... among several other numerous factors, this may very well be possible. Not every user is able to expend their maximum spending limit. The purpose of the max daily spending limit is to limit a company's or user's advertising budget, not so you can measure maximum output. That said, if he isn't hitting the target maximum, he probably isn't doing something right.
4] He tried to open several adwords accounts, but the spend doesn't increase more than 10k/day.
This again goes back partly to answer number 1. It depends on his approach. I also want to give a word of caution on being careful about opening multiple accounts. There is strict rules about this and you can risk getting banned. Check with Google TOS accordingly.
5] He has a huge keywords database on different verticals
This maybe true but having large amounts of keywords can be both a good thing and a bad thing. Again, back to number 1, the approach and the method of testing is crucial.
6] What would you suggest as possible alternative sources of quality traffic?
I'll assume your friend is trying to get targeted quality traffic and it sounds like he's trying to get it on a massive scale at that. It's really hard to give detailed suggestions without writing out a really long article. The short summarize version of what I would suggest up front is paying for reviews from sites that are in the same niche.
Definitely test out PPC on 2nd, 3rd, 4th, etc... tiers. Check out paid reviews. Depending on the niche, check free alternative sources of traffic i.e. related forums. There are several ways to go about this and theres no one correct answer. Perhaps if you gave more detail on the kind of traffic your friend is looking for, niche, traffic level, exact testing he has done, others can give a more in-depth answer once they understand the situation better
