Search engine marketing is a loosely defined term that can refer to one of two things. Some Internet marketers use it to refer to what we call search engine advertising, however we like to use it as an umbrella term that includes search engine optimization as well. Whatever the usage, the goal is to get search engines like Google, Yahoo and Bing to send traffic to your site. There are pros and cons to both methods, and many marketers use both techniques.
Search engine advertising can also be called "paid results" or even Pay-per-click (PPC for short). You can place a bid with the search engines in order to get your site listed on certain search phrases, and within a few hours your site will appear in the sponsored section of the search engine listings. Every time someone clicks on your link, the bid amount offered is subtracted from your predetermined budget.
PPC generates the largest portion of Google's multi-billion dollar annual revenue. It is also the only officially sanctioned method of appearing in the search engine results.
Almost always referred to as SEO for short, search engine optimization seeks to get your site listed in what is called the "organic listings", also known as natural results. Official information on how to improve your website ranking is difficult to get directly from search engines. However. that doesn't mean SEO is against their terms of service, but there are certain agressive spam techniques that can get you in trouble.
There are no shortcuts that will help you land on the from page of Google and other search engines. Hard work and patience is required in a search engine optimization campaign.
As you can see in the screenshot, from a user perspective there is a fine line between paid search engine listings and unpaid ones. Early search engines weren't required to label the results at all, but due to pressure from consumer advocacy groups and regulators, the two must be clearly distinguished.