Let’s get down to a few definitions:
Search Engine Optimization: Search Engine Optimization, or SEO, is the process of assisting the search engines in ranking your web pages by improving the on page features of your website and by promoting it through link building strategies like blogs, articles, and reciprocal link requests. The focus isn’t so much on traffic building. Rather, you are simply trying to ensure that the search engines rank your site well for your important keywords.
Search Engine Marketing: Understand that search engine optimization is a branch of search engine marketing. With Search Engine Marketing (SEM) you are promoting your website by promoting it in various ways that get it noticed in the search engines. It is more than simply improving your website through SEO, though it does include that. SEM also includes pay-per-click advertising, inclusion fee listings, social media optimization, directory submissions, and related marketing tactics. All of these marketing strategies are designed to get your site noticed by the search engines so that you rank well for your important keywords. Notice, however, that SEO focuses more on your website whereas SEM might not necessarily be about your website but in how you promote it.
Internet Marketing: Internet Marketing is a much broader term than either SEO or SEM. In fact, search engine marketing is a subset or branch of Internet Marketing. A good definition of Internet marketing takes into consideration all forms of media available through digital delivery. Therefore, this term must encompass a broad array of strategies that you can use to market your website and your business in this Web 2.0 – or should I say Web 2.5? – world. Internet Marketing includes such activities as e-mail marketing, banner advertising, affiliate marketing, e-book downloads, podcasting, video marketing, viral marketing, RSS, and anything that uses the Internet as a mode of delivery for the purpose of promoting your business.