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In this video tutorial, the instructor covers how to create a watermark in Publisher 2016. They begin by explaining that a watermark is a semi-transparent image that appears in the background of your publications. The instructor demonstrates adding a logo as a watermark on the master page, which is accessed in Publisher for adding elements like watermarks. Watermarks can be used for logos or to indicate draft copies. Using the master page ensures that the watermark appears on all pages within the publication.