Google Analytics allows you to setup what are called tracking URLs. They can be used when you "tag" your URLs with tracking code that allows for GA to translate which medium is generating what traffic.
http://support.google.com/analytics/bin/answer.py?hl=en&answer=1033867 This is a tool that Google offers to help you generate your URLs. There are also spreadsheets available online that allow you to create the URLs in Excel but they aren't always 100% accurate. What you are doing is ultimately creating parameters that allow for custom campaigns to be setup within Analytics. This allows you to monitor more than just the clicks, but allows you to generate custom reports that are more insightful and provide better data.
Once your URLs and Campaigns are created and running smoothly, you will be able to look at the data of the multi-channel funnels. This feature allows for attribution to be given to the digital and non-digital channels that don't always get the credit for the conversion. There is a lot of data can be pulled from these models and they really help to better allocate resources if needed.
I hope this all makes sense and Google actually did a very good job of explaining these resources on their analytics guide. I would take a look there as well to get a better understanding before diving right in.