SEO is essentially a component of the larger category, SEM. According to Google’s Knowledge Graph, search engine optimization is “the process of maximizing the number of visitors to a particular website by ensuring that the site appears high on the list of results returned by a search engine.”
According to Wikipedia, “Search engine marketing is a form of Internet marketing that involved the promotion of websites by increasing their visibility in search engine results pages (SERPS) through optimization and advertising.” SEM includes SEO tactics, as well as several other search marketing tactics.