SEO/SEM and Site Analytics
SEO or Search Engine Optimization and SEM or Search Engine Marketing are related fields. Both initiatives attempt to improve a web site's visibility in the global network we call the internet by improving the frequency with which a typical user's keyword search on a popular search engine will return that web site at the top of the list. Getting your site to the top of the list is a complicated process but can be summed up in a few short words. Relevance, Authority and Popularity.
Relevance - when your site is relevant to the keyword being searched, it means that the majority of the content on your site is related in some way to that keyword. The content being analyzed can be page titles, page headings and sub-headings, out-going links, in-coming links, meta-keywords, meta-descriptions, alternate image descriptions and a few other potential sources (though the prior list are the most important or 'relevant' ones). As the site owner you can control all of the content described except one... in-coming links. SEO is the science and art of getting the most out of what you can control. SEM is the science and art of getting the most out of what you can not (or attempting to persuade, cajole, or possibly even purchase some control) aka in-coming links.
Authority - See Relevance and add in historical relevance... which is to say, "how long have you been relevant?". When a site has been around long enough to become and authority - it means they have been relevant for a very long time in internet terms. This happens when other very relevant web sites which are also authorities in their own right begin to link to your site as THE place to find information about a topic. Needless to say it is not easy to become and Authority on anything non-obscure (it is very easy to become and authority on something that nobody else cares about ;-p).
Popularity - Yes it's important. Popularity is of course your best bet on becoming both Relevant and an Authority. If nobody knows about you, you won't become either. So... the more people who visit your site and more importantly, link back to you... the more popular you become and if the web sites which are linking to you are Relevant, then you gain some of their good will... by becoming more Relevant yourself. As you collect more of these links your Relevance will surpass that of the web sites linking to you and when you become the MOST linked to web site on the topic - you become an Authority.
Site Analytics is a way to measure how well you are doing in the above 3 areas. Tracking systems such as that provided by Google or other vendors, give you the tools to analyze how well you are competing both against your own goals and against the internet in general. Other services such as ComScore and HitWise allow you to benchmark web sites against other web sites using a standard suite of tools and finally services such as Fireclick and LiveMark allow you to benchmark your web site against industry verticals and sub-verticals (though not necessarily your competitors).
Additionally Site Analytics provide insight into how you customers are using your site - which can be much more valuable in the long run than any sort of Search Engine related efforts. Getting your customers to your site is a very high priority but KEEPING them coming back for more should be even higher. Site Analytics can tell you where customers are coming from, what they do when they get there and when and where they decide to leave (though not always why). This is especially important to any site which offers eCommerce as shopping cart abandonment is still the top problem for any online store. All other types of interactive applications can benefit from similar analysis however - where completing a Web 2.0 task of creating content and sharing it with your site's community is just as important to a content/user centric web site and discovering that your potential users are leaving before they even finish using your tools is a big problem that you want to know about.
So to sum up, SEO/SEM is about getting users to your site. Site Analytics is about keeping them there until they complete the call to action - and coming back for more.