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In this video tutorial, Sean from Tracker Software explains how to add watermarks to documents using PDF Exchange Editor. Watermarks are useful for protecting documents and indicating ownership. To add a watermark, click on the organize tab, then the watermarks drop-down menu, and select add. You have the option to use an image file or custom text for the watermark. The preview pane displays the created watermark, which can be customized with font, alignment options, and macros.