How it works
The link carries a path and parameters, and the app contains routing code that reads them and shows the matching screen. There are two technical forms. A custom URL scheme (for example myapp://product/42) works only if the app is installed. Universal Links on iOS and App Links on Android are ordinary https addresses that the operating system hands to the app when it is installed and opens in the browser when it is not. Marketing deep links usually pass through a link service that records the click for attribution before the app opens.
Why it matters for an app team
Every extra step between an ad and the thing it promised loses users. Sending someone from an email, an ad or a QR code straight to the right screen shortens that path, and because the click is recorded, you can see which message brought them.
In practice
Example with made-up numbers: an email about a sale goes to 20,000 users who have the app, half with a link to the app's home screen and half with a link to the sale page. Comparing how many people in each half buy shows what the deep link adds.
Common confusion
A standard deep link only works for people who already have the app. Taking a new user through the store and then to the right screen is deferred deep linking. "Deep link" is also used loosely for any tracking link; strictly it means a link that routes inside the app.