SEM (Search Engine Marketing) is the process of promoting a business online to achieve higher visibility in the search engine listings. This can be achieved by using paid listings i.e. Google Adwords, which can be very expensive but the benefits are it can be quick to get traffic and is useful for seasonal and short term campaigns.
SEO (Search Engine Optimization) means optimizing the HTML and other content of a web page/site for relevant, targeted key phrases in order ot attain higher natural listings than competing websites. SEO provides a less expensive long-term solution for increased, quality traffic and generates customer enquiries that ultimately convert to sales.