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In this tutorial, the video explains how to replace photo placeholders in a Word template. To start, right-click the photo on the cover and select "Change Picture" from the file. After choosing an image, if it doesn't fit the placeholder properly, use the "Picture Format" menu to crop it. Adjust the crop handles to the desired size and then resize the image to focus on the male figure in the photo. Position and center the image appropriately, ensuring it fits well within the designated area. Once satisfied with the adjustments, click off the page to finalize the changes.