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In this tutorial, the instructor demonstrates how to create a watermark in Publisher 2016 using a publication titled "Rocket Drag Racing." The process involves inserting a logo, specifically an image of a wheel with a flame, as a background element. The watermark is added through the master page, which allows for the application of semi-transparent images across all pages of the publication. This feature is useful for displaying company logos or marking documents as drafts with a transparent "draft" image. The video covers the steps needed to access the master page for this purpose.