As per the documentation:

When an ECMAScript pattern syntax is used, a back-reference can be created by putting parenthesis around the part of the pattern that must capture the back-reference.

So taking the example that follows in the documentation:

^(www\.)(.*)$

And using the input string www.foo.com in the conditions, you will have:

{C:0} - www.foo.com
{C:1} - www.
{C:2} - foo.com

To make it simple:

  • {R:x} is used as back reference from the rule pattern (<match url="...">).
  • {C:x} is used as back reference from the condition pattern (<conditions><add input="{HTTP_HOST}" pattern="..."></conditions>)
  • The 0 reference contains the whole input string
  • The 1 reference will contain the first part of the string matching the pattern in the first parenthesis (), the 2 reference the second one, etc...up to the reference number 9

Note:

When "Wildcard" pattern syntax is used, the back-references are always created when an asterisk symbol (*) is used in the pattern. No back-references are created when "?" is used in the pattern.

http://www.iis.net/learn/extensions/url-rewrite-module/url-rewrite-module-configuration-reference#Using_back-references_in_rewrite_rules