Paid inclusion is a search engine marketing method in itself, but also a tool of search engine optimization, since experts and firms can test out different approaches to improving ranking and see the results often within a couple of days, instead of waiting weeks or months. Knowledge gained this way can be used to optimize other web pages, without paying the search engine company.
Additionally, there are many situations where PPC (a component of SEM) makes more sense than SEO. For example, if you are first launching a site and you want immediate visibility, it is a good idea to create a PPC campaign because it takes less time than SEO, but it would be unwise to strictly work with PPC and not even touch search engine optimization.
Digital marketing is defined by the use of numerous digital tactics and channels to connect with customers where they spend much of their time: online. From the website itself to a business's online branding assets -- digital advertising, email marketing, online brochures, and beyond -- there's a spectrum of tactics that fall under the umbrella of "digital marketing."