Digital marketing is just the use of anything digital for marketing. Any type of marketing you do on TV, the Internet, digital displays, or any other digital format is considered Digital Marketing. SMO (Social Media Optimization) is optimization to achieve results in social media. It can include using social sites (Facebook, Twitter, etc), RSS feeds, video sharing sites (like YouTube), adding sharing buttons to your site, creating shareable content, blog commenting, webinairs, and many other methods where the emphasis is on interaction. While SEO (Search Engine Optimization) focuses on getting good placement in search engines, SMO focuses on purely driving traffic for your average website. Basically anything you can use to bring traffic to your site, outside of search engines (and things like paid traffic) is considered SMO. While SMO is commonly viewed as being all about getting targeted traffic, it also commonly used by a company/brand to try and improve or maintain a certain image. An example would be Coca-Cola having a movie star mention, in a Tweet, that they are on the set of a movie they are making and are going to go drink a Coke Zero while they start getting their makeup put on. Fans of the movie star might be more inclined to like Coke Zero since the movie star endorsed it (same principal as when you see someone famous in a TV commercial endorsing a company/brand, except it looks less like a sales pitch).