How does watermark image exactly work?

Hi guys,

could someone please explain how the watermark image exactly working? I added an image (our logo) in FPD  settings, but when I - as a customer - download the product (it is a label), the watermark image isn't shown. The 'Lightbox: Update Product Image' setting is on. On this way if the customer is ready with the customization, he can download the personalized label. Am I doing something wrong? Any help much appretiated. Thanks in advance.