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In this tutorial on Publisher 2016, the presenter demonstrates how to create a watermark. The example used is a publication titled "Rocket Drag Racing," and the watermark will feature an image of a wheel with flames, intended as a background. To set a watermark, users must work on the master page, which allows for the addition of semi-transparent images across all pages of a publication. This technique is commonly used for branding, such as placing logos, or to indicate the document status, like marking something as a "draft." The tutorial guides viewers through accessing the master page for this purpose.