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Differences between search engine optimization and marketing

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Confused by search engine optimization and search engine marketing? Is there even a difference between both techniques? To make matters worse, both terms are often used interchangeably by supposed industry experts. It's important to note that each method is different and in this article, I hope to accurately detail what the fundamental differences are.

Search Engine Marketing definition
Search engine marketing or SEM, refers mainly to the text advertisements which appear at the top or on the right hand side of search engine results pages. These advertising links are purchased mainly from Google (Adwords) and Yahoo (Overture). They then in turn publish these ads on their secondary ad network as well. For example AOL displaying Adwords.

These ads are Pay Per Click (PPC), meaning you pay for every time someone clicks on your ad. The ranking sequence is determined by a variety of factors such as top bid price, and in Google's case, a more complex combination of Click Through Rate (CTR) is thrown into the mix. Essentially in Google's Adwords, the less clicks on your ads, the more you have to pay and/or your ranking drops. This is because in Googles ranking system, it has deemed ads that are highly relevant (high CTR) should be rewarded with lower prices and better rankings. In the Overture system, ad rankings are based purely on bid prices, so theoretically, the advertiser with the most money wins top spot.

In many instances though, the top 2 spots are not necessarily the best positions. Often times, you will find that #3 - 5 are the optimal positions as you invariably pay a much lower click rate. Not to mention the many surfers, by the time they reach your ad, have probably price shopped or done comparison studies with your competing sites.

SEM also includes any banner advertising or ad placement advertising at authority related sites. So charge a flat monthly fee or a cost per impression. Traffic from these ads tends to be high, but the conversion rate is debatable.

In a nutshell, SEM is very controllable form of marketing in the sense that you have complete control over the budget, keywords and websites you wish to target.

Search Engine Optimization definition
Search engine optimization or SEO refers to improving a web sites' natural and organic ranking in the search engine results page. This more affordable method is often slow and new web sites may take up to a year to achieve decent rankings in Google. The methods of achieving high rankings are based on 2 main components, which follows,

On-page optimization
Keyword density 
Title Tag optimization
Keywords in the content
Quality of original content 
Keywords in hyperlinks 
Keywords in headings and bold tags 
Keywords in URL