What is Search Engine Marketing (SEM)?
SEM (Search Engine Marketing) is the process of marketing your website on search engines. This means you pay for your website listing to be shown in a search engine results page (SERP).
In the past, "SEM" was a term used to refer to organic & paid search visibility. As the engines became more technical & refined, the optimization required more expertise. From this evolution, 2 major branches of expertise developed: organic search (SEO), and paid search (often referred to as "PPC"). Pay-per-click (PPC) & SEM are essentially used today as synonyms. PPC is actually just a bidding method which became popularized because users only paid when they click, so advertisers could show impressions at no charge.
Today, SEM, Paid Search, & PPC (even if you don't use the pay-per-click bidding model) are all just synonyms.
In the future (I think) marketers will use the term "search engine marketing" or SEM when they refer to paid advertising on all search engines or at least all of the search engines important to a specific vertical. YouTube, Amazon, & Pinterest are all examples of search engines which paid search strategies can be applied. Google & Bing are just paving the way and developing the model for which the other search engines follow.
SEM vs. SEO vs. PPC
With so many acronyms in a new industry, things can get confusing. Here's an easy breakdown:
SEM
Search Engine Marketing
Keyword/search query based advertising, where we pay to show our ads in certain positions on the search engine results page (SERP). SEM allows you to become visible very quickly, and bid on search queries which are highly targeted (geographically, time of day, day-of-week, for example).
SEO
Search Engine Optimization
SEO is the practice of getting your website to rank "organically", without having to pay to show your website in the search engine results. Search engines change algorithms, and this is an ongoing process. This process takes more time than SEM, but has sustained results which you don't have to continue to pay for.
PPC
Pay-per-click
A bidding model popularized by advertisers being able to show their value proposition for free, as long as the user doesn't click. Most ad platforms are auction-based, so advertisers get to input a cost-per-click (CPC) they are willing to pay for each click. This is not limited to search engines, PPC models are used in social media & other advertising platforms.