I completely agree with Danielle about the lure. I use a food lure to teach behaviors to my pups, but I only keep the food in that hand as long as absolutely necessary - usually that's within the first brief training session or two. Once they've followed the lure into position a couple of times, I use the lure motion with an empty hand and treat from the other hand. I wouldn't even worry about getting a solid verbal command until he fully understands your hand signal without food in it, so start there. Gradually fade the signal to something more subtle. In the beginning I start with my palm going all the way down till it touches the floor while I'm sitting with the puppy, and fade it to where I can simply point to the ground with one finger from a standing position.
Once he'll drop immediately into a down when you give him the hand signal, do what Samba said - say the word, wait a beat or two, then use your hand signal. Always do whatever the dog doesn't
know before what the dog does
know. It will become a predictor of what will follow, and create an association between the two. Do not do them at the same time because the dog will tune out the meaningless word and focus on the hand signal that he recognizes! Once you try that for a while, give the verbal cue and start waiting longer and longer to follow up with the hand signal, and only as a reminder (if necessary) of what the word means. I've counted off as much 20 or 30 seconds in my head while waiting for the pup to work through it and figure it out, and when they finally DO, it's a huge party!
But work up to that, a few seconds at first is plenty.
Another thing I did with all my puppies was to wear my treat bag at all times when I was home, with my clicker attached to it. Any time the puppy laid down I'd click and toss a treat. Don't say a word, just wait for him to do it. You can use a verbal marker if you prefer, doesn't matter. If you toss the treat away from him so he has to get up to get it you can get a lot of repetitions in a short time period. The more you reward it, the more he's going to offer it, and when he gets up to get the treat and you can see he's about to lay down again, use your cue right before he does, then mark and reward.