SEO generally relates to organic traffic while SEM relates to paid traffic, but that generalization is debatable among SEO/SEM experts. If immediate results are desired, SEM is the best approach, but the high cost of paid placements can quickly exhaust even robust budgets. SEO results take more time to actualize, and typically costs as much as SEM, but it will reap rewards with high link placements for months, or years to come. You can think of it as an investment, SEM is short term, SEO is long term.