Campaign Tracking shows you how your Campaigns actually performs - how many visits, page views, downloads and if your goals are achieved as a result from marketing efforts in external sources.
Example of external sources that drives traffic:
Search Advertisement (Google Adwords)
Social marketing (Facebook, Twitter, LinkedIn)
Display advertisment and banners
By associating sessions with a campaign you can segment and filter visits and visitors based on traffic source such as a specific ad or an email. If a visitor comes from a campaign it is clearly visible in the Visits List using a green icon.
Dynamic campaigns are created automatically when a visitors landing page contains UTM parameters. UTM parameters is originally Google Analytics format of segmenting traffic coming from external sources, but has now more or less become industry standard.
utm_campaign => Mandatory. Gives the Campaign a name, for example “christmas_promotion”
utm_source => Optional. Identifies the source, for example Adwords or Mailchimp
utm_medium => email, advertisment, social
Under Settingsg > Campaigns you can handle static campaigns by specifying a URL for the landing page. If a visitor lands on the specified URL it is flagged as the campaign.