Search engine optimization (SEO) is the process of improving the visibility of a website or a web page in search engines.In general, the higher the page rank, frequently more people visit the site thereby increasing the traffic to the site. This gives a website the web presence.
Search Engine Marketing (SEM) is a bigger term than SEO, and includes different options like paid ads,Pay-Per-Click.
SEO aims to provide better pagerank in search results, SEM uses the search engines to advertise the website to Internet customers.
For example, when people search for "to buy cellphone" in a search engine..SEO will help the respective cellphone selling website to be placed in the search results whereas SEM will be the paid advertising displayed above or beside the search results.
Now,many people may not be interested in the ads and believe in the main results and click a website with higher pagerank.SEM may be more useful for ecommerce websites whereas if someone is searching for "to speed up my internet"...the SEM will allow ads like some hardware/internet booster but it is SEO which will help the blog/website which details the steps to improve internet speed..now a user will be more interested in performing those easy steps to improve the internet speed and the choice of hardware will be secondary.
SEO and SEM are not competitive. SEO is considered as one of the method of SEM.The advantages of SEO over the other SEM make it clear that,SEO must be your first step in promoting your site.I am using the SEV service from Thewebpole.com which covers the major SEO techniques and helps in obtaining the desired pagerank for my cosmetic review website.