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SEO
Put plainly, Search Engine Optimization (SEO) is the practice of adding key phrases to your site in a way that the search engines take notice and appreciate. A quality optimization will identify your web site to the search engines as a site about some topic thus helping them rank you well in a search on that term.
SEO vs. SEM
Search Engine Optimization (SEO) is a process of organizing your web page content and code to be as highly presentable and technically available on your desired keyword as possible. SEO specialists call upon a variety of tasks to modify linking structure, meta tags, and page content in order to help your website to help itself.
Think of SEO as a practice of altering your website in such a way that your most lucrative keywords stand out from the other content in your pages.
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Search Engine Marketing (SEM) calls upon a considerably wider-scope to drive traffic to your optimized website. While SEO helps your website to reach out to the search engines on its own merit, SEM calls on a variety of marketing methods to persuade the search engines to favor your domain. SEM methods include keyword research, competitor analysis, link building, content development, Pay Per Click advertising, affiliation, and more.