Assets are the static files that your application uses such as images, custom JavaScripts, custom CSS or anything else you might need.
There are two ways to manage your assets: the Asset Manager web interface in Media Factory and via WebDAV.
The Asset Manager can be accessed via Applications > Assets in Media Factory. This basic interface is limited to uploading one file at time, whereas WebDAV allows batch uploading using drag and drop.
Note the two fields highlighted above: Template URL and Absolute URL. The absolute URL is the actual path to the image which MUST be used in the template application - relative URLs will not work. The Template URL makes use of the {$assetbase} variable, which renders the base path to your assets. So, when placed in a Media Factory template, both of these strings will render the same URL path.
Why would we do such a thing? The first and most important reason is that your assetbase URL can change if you choose to enable secure HTTPs on your project. Recent changes in Facebook now require all apps to be HTTPS, and if you used {$assetbase}, all your URLs can be updated at once. Another benefit is portability across projects, each of which have their own asset base URLs.