Search engine marketing (SEM) is a type of internet-based marketing associated with the researching, submitting and positioning of a website within search engines to achieve maximum visibility and increase your share of paid and/or organic traffic referrals from search engines.
SEM involves things such as search engine optimization (SEO), keyword research, competitive analysis, paid listings and other search engine services that will increase search traffic to your site.
Contrast With SEO
SEM is a broader term than SEO. Where SEO aims to provide better organic search results, SEM helps you successfully target users of search engines via advertising (paid) links in search results in addition to organic search to send targeted traffic to your website.
SEO and SEM are not competing services. SEO is considered a subset of SEM services. Today, if you want to conduct business on the Internet you need to be visible in both organic and advertised links, which means you need both SEO and SEM.
Recommended Reading: The Difference Between SEM and SEO.