Customize the watermark. Use the settings in the dialog box to do so: Click on Picture to use an image for a watermark. The watermark will be applied to and appear behind the text and images in your Word document. Because that's just how Word's watermarks default on the page.

While you do need to use the 'Word Art' mode to insert line breaks into a watermark, this workaround does not have any real limitations. It's non-intuitive but it works fine. From Microsoft MVP • Insert watermark using Insert Watermark. • Enter some text and click Ok. (You can edit the text later steps.) • Double-click on the header area.

• Right-click on the watermark text (when your cursor becomes four arrowed one), select Edit Word Art from the context menu. • In this mode you can add line breaks, change fonts, etc. • Click Close in a header/footer to close. I believe that Stefan Blom's answer is generally correct, but his menu pick descriptions don't match well with what I see on Word 2013 under Windows 7. I believe this procedure will be a little easier for others to follow on Word 2013, and adds quite a few useful explanations: • Design → Watermark → Custom Watermark • Type text as desired.

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This dialog is very basic; typing elsewhere and pasting in (making sure you have the correct font selected; font changes within an object appear to be not allowed) appears the only way to get special characters into this field. • Set font, fontsize, color, and desired transparency. (The default 'rubber stamp' watermark is automatic color and transparent.) • Edit the header by Insert → Header or double-clicking in the header. The insertion point needs to be in header (the object's anchor will land where the IP is) and header-footer editing needs to be active in order to continue in this process. Word stores watermarks as WordArt objects anchored to the header (and you can manually place them in the footer as well).

• Double-click the watermark image to bring up the WordArt ribbon. • Toggle Vertical Text as desired. The effect is true vertical text, not horizontal text rotated 90°. • Edit Text to change text as desired and to insert or remove spaces to adjust height of the vertical text. (A space isn't worth much vertical distance; you might not see the effect of adding a single space. I needed 110 spaces using Wingdings 3 at 16pt to span body + footer on Letter.) • The Word Art process seems to slightly magnify and possibly distort the characters.

If you have a sample of characters at the desired fontsize in body text, at 400+% View magnification, it is easy (but tedious, as adding or deleting spaces in text triggers automatic re-scaling) to play with object scaling to make the watermark object's glyphs match the sample character. (Yes, I know Word is not a typesetter, but I've been getting decent and repeatable results, and I don't get a choice of tools at work.) • Copy, cut, paste, move, rotate, scale, etc. The object as needed - it seems to be just another anchored object. I haven't experimented, but there is a yellow label hotpoint associated with the object - it appears you could apply a label to it. Related tips: • The automated watermark tool apparently uses the same process to create a WordArt object; you can apply the same techniques to an object created by the watermark tool. Only MS knows why they didn't make vertical text a radio button on this tool's dialog.