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What is Search Engine Optimization and Marketing?
Search Engine Optimization and Marketing are generally defined as two different terms, but then again depends on the company or individual. Search Engine Optimizers increase your visibility through the organic listings which are located on the left throughout all 3 major search engines (Google, Yahoo, and MSN). Now search engine marketing on the other hand is what you generally see on the right which is known as sponsored listings, pay per click, or PPC.
Search Engine Optimization is also known as SEO throughout the online marketing world. If you do a search for SEO on Google you will find tons of information related to SEO. Generally when using SEO practices the individual will build incoming links into your site with the keyword you want to rank for in the anchor text.
Inbound links are what make you rank on Google, so keep in mind whatever anchor text is in your backlinks then there is a good possibility you will rank for that keyword or at least your search rankings might come up a bit for that given word. Link from link varies, some links are to be known as more "authoritative" and other links could be more "spammy" which will give your site no credibility what so ever.
A popular strategy used in the SEO world is creating content that will drive links which is known as link bait content. When the SEO creates link bait content he tries to create something that will be appealing to the audience reading it; therefore, possibly them linking to it. Some companies or SEO's will participate in link exchange programs which are generally dead now days because Google likes to see natural inbound linking through content - that is why the link bait strategy is becoming more and more popular.
Search Engine Marketing which is also known as Pay-Per-Click or PPC is a whole different story. Pay Per Click can be very profitable, but takes a lot of skill to work with. The average Joe cannot just jump into PPC and expect to make profits from it right off the bat especially if marketer plans on promoting affiliate products - affiliate marketers have a very small margin to work with because they are sharing into the companies profits.
Each Pay-Per-Click search engine is different. For example Google AdWords seems to take your CTR into consideration across the Google Search network than anything else in their ranking algorithm. Most generally the Ads with the highest CTR (click through rate) across the search network will perform better you will get higher positions, but at the same time getting cheaper clicks.