Kevin, one of the founders of Wufoo, does a great job of explaining how he grew the product by word of mouth. He built it from the trust of his users, most of which was from http://particletree.com/. It's fascinating how much emphasis he puts on interacting personally with the paid users and how they scaled that. Definitely a lot of hard work, but it paid off when they had some server trouble when Wufoo first launched - their old users trusted them and backed them up when some of the initial comments were negative.
Long story short, he didn't do any search advertising either.
Interview here: http://mixergy.com/wufoo-kevin-hale/
I think the problem is that those searchers are likely just looking for free online tutorials, not a paid solution. They got plenty of clicks, but few sales. I ran into the same problem with my outsourcing company. Small businesses with 5-10 employees aren't searching for outsourcing on Google, big multinational companies are. But I don't have a 1000 seat call center, just a dozen guys who can do web design, data entry, etc. It turns out my target market was best reached through word of mouth among small business owners, not through Adwords.
