What a watermark is actually for
Watermarks do three distinct jobs and it helps to know which one you are doing. The first is status: DRAFT, CONFIDENTIAL, NOT FOR DISTRIBUTION. This is about preventing an honest mistake — stopping a draft being quoted as final, or an internal document being forwarded without thought.
The second is attribution. A company name or logo across a document establishes where it came from as it gets forwarded, which matters for proposals, reports and anything you would like credit for.
The third is deterrence. A recipient's name across every page of a document makes casual redistribution unappealing, because any leaked copy identifies who leaked it. This is common practice for pre-release material and confidential financial documents, and it works precisely because it is visible.
Making it readable without ruining the document
The tension is permanent: a watermark that is easy to ignore fails, and one that dominates makes the document tiring to read. Opacity around fifteen to twenty-five percent is usually the right balance — clearly present on every page, not competing with the text.
Diagonal placement across the centre is the convention for status watermarks, because it crosses the body text and cannot be cropped away without obviously damaging the page. Corner placement suits attribution, where the aim is to mark the document rather than to interrupt it.
Watch the contrast on documents that are mostly white space. A watermark tuned against dense text can look aggressive across a title page, and one tuned against a title page can vanish entirely over a table. If the document varies a lot, check a few representative pages rather than just the first.
What a watermark does not do
It is not a security control. A visible watermark is part of the page, and anyone with a PDF editor can remove it or cover it; anyone with a screenshot tool can crop around it. If a document genuinely must not be read by the wrong person, encrypt it — the watermark is a signal, not a lock.
Nor does it prevent copying of the text underneath, which remains selectable regardless of what is drawn over it. A watermarked document is exactly as extractable as an unwatermarked one.
What it does reliably is change behaviour by making the document's status impossible to overlook. Most unwanted distribution is careless rather than deliberate, and a watermark addresses carelessness very effectively while doing nothing at all about intent.
Watermarking for review cycles
The most valuable use of a watermark is on documents that will exist in several versions over several weeks. A proposal goes out as a draft, comes back with comments, goes out again revised, and at some point somebody quotes the wrong version in a meeting. Marking each round clearly is the cheapest insurance against that.
Include something that distinguishes rounds, not just status. DRAFT on its own does not help when there are four drafts in circulation; DRAFT 3 - 14 MARCH does. The recipient can tell at a glance whether the copy in their inbox is the one being discussed, which is the entire point.
Remove the watermark for the final version rather than leaving a faint DRAFT on the document that gets signed. It sounds obvious, and it is one of the more common causes of a contract being queried months later — a document marked draft is exactly the sort of thing a dispute will seize on.