In short, building a website so search engines will 'present' your website to the right audience. This is achieved by applying keywords to the content and the metadata, correct use of HTML tags like headers and page titles, page speed, analytics and much more. Search engines like Google, Yahoo, and Bing look for this data to understand a website. Because this is 'built in' to a website's code, it's often referred to as 'On-site' Search Engine Optimization.
Any online marketing strategy to help gain online visibility or to drive traffic to your website using the internet can be considered online marketing including; citations, social networks, banner advertising, link building, blogging, Pay Per Click Campaigns (PPC), email broadcasting and so on. Of course, all the above can come under the umbrella of a larger marketing campaign which could include traditional media like; print advertising, TV, radio, poster ads, flyers etc, this is often referred to as 'full stack marketing'.