From James Marshall,
Your Guide to Word Processing.
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Watermarks can help you manage your documents. For example, you can mark a document as a copy or as an original. Or, you can mark documents confidential. You can also assign a priority level, such as Urgent, to a document.

To add a watermark to your Word 2007 document, follow these steps:

1. Open the Page Layout Ribbon

2. Click the Watermark button

3. Select the watermark you would like to add to your document

Note: The watermarks are arranged by type. Use the scroll bar to view all of the available watermarks.

If you would like to customize a watermark or use an image as a watermark, you can.