A watermark is a notice (e.g., “Draft,” “Confidential”) that’s printed in the background of a page. Often in six-inch letters. Diagonally. In red.
Watermarks interact poorly with the text, creating visual noise that distracts from reading. Also, watermarks can darken considerably when photocopied, aggravating the problem.
It’s hard to make watermarks look good. Better to relocate the watermark text somewhere inside the header or footer.