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Our experience is that these smaller providers rely on partners to bring most of their traffic. When you think about why these partners choose to be on smaller networks (with less advert coverage), it gets scary. I would guess that many have been banned from the larger networks.
However, there are gems to be found on small networks. There are partners that just don't know any better, they have no idea of the other options open to them, and hence are far less likely to be fraudulent.
If you find a network that is happy to filter out dodgy/inappropriate sites that you find then you can end up with positive ROI. The problem with this approach is the time it takes to deal with the issues, and many of the small networks just don't provide enough traffic for it to be worthwhile.
I'm looking forward to your feedback on anu UK PPC providers (if you are using any).