The difference between SEO and SEM is simply that Search Engine Optimization is part of Search engine marketing or Search marketing as it is widely known. Both processes aim in increasing visibility in search engines. SEO is about optimizing the web property to get better rankings in the search results while SEM goes beyond SEO.

SEM is search engine marketing and SEO is search engine optimization. SEO is a part of SEM like other online marketing techniques ppc, cpc etc...