Colour photographs work great with watermarks, and always scan reliably. Try and fill your artwork with as much colour photography as possible.
White space will not take a watermark, and will not scan. Also, be careful with large areas of solid colour as they can ‘reveal’ stronger watermarks, which means people might be able to see them with the naked eye.
You should only watermark your image once you have it ready for print.
If you change the size of the image by more than 10%, the watermark may stop working. The image you watermark should be the same dimensions and resolution as the final print size. If you are not sure what height, width and resolution to use, check with your printer.
If you are using a TIFF, make sure your image is ‘flattened’ before watermarking (and is not ‘multi-layer’).
If your image is too big, it won’t work. Try compressing your image to get the file size down below 150MB.