SEO and SEM are used interchangeably by the novice marketer and the unknowing client. SEM and PPC are used interchangeably by the adept agency and experienced client-side marketer.
This separation of church and state is starting to blend. It used to be that organic and paid search were undeniably, uniquely different. Certainly, that was one key to Google's success, but it's actually remarkable to consider:
98% of the time Google does NOT generate advertising income even when the messaging for their ads is present. Even though those clicks, display ads, and video views represent approximately 84% of the company’s income, they just don’t compromise on their company’s promise to “Organize the World’s Information”.
On many occasions, search result pages don't show ads at all. Meanwhile, the clicks are becoming more and more relevant to consumers and especially so during the shopping phase of searching.
Google knows that if they ruin the experience of their search product, everyone will stop using it. So, whether it’s organic search, paid search, display or video they just aren’t willing to cook the Golden Google Goose of Relevance.