Most people think that SEO and SEM is the same thing. But that is wrong conception. SEO and SEM though may sound similar but have different components that make them. SEO in one hand is completely focused to organic search engine ranking whereas SEM also focuses on inorganic and sponsored ranking on Search engines.

What is the difference between SEM and SEO?
SEO is purely in optimizing pages to get higher ranking in SE but SEM includes things like viral marketing, PPC ads on other
Search engines too. Search Engine Marketing is way to get into search engines even by paying for sponsored listing in search engines, whereas SEO only focuses on natural results.

Which is better for a site SEO or SEM?
Both are highly required for any website to get good traffic. SEO can get you true search engine traffic while SEM can even bring you traffic from other websites which display sponsored ads from PPC programs. This way both are equally important and should be used together to achieve good results.

The process of both SEO and SEM is quiet time taking, but if both are managed properly can bring in extensive traffic for a website.