Here is a discussion from a sibling site: Is watermarking worth it?
And here is a rundown from the most prolific image poster on the web, Trey Ratcliff:
https://plus.google.com/+TreyRatcliff/posts/UTKKo5Su6Rj
Why I Don't Use Watermarks
I get this question a lot, and I know it came up in the live hangout
last night. I know my opinion is different than many other
photographers, and that is okay.
As you may know, my work is all Creative Commons Non-Commercial. That
means people, as long as they give credit and link back to
http://www.StuckInCustoms.com , can use my images on their blogs,
wallpaper, personal use – anything – as long as it is not used
commercially. Every day, I upload a HUGE 6000+ pixel max-resolution
image to the Internet. I do not have any fear at all… Believe me, it’s
quite liberating living in a world without internet-stealth-fear.
People that want to license our images regularly contact our licensing
team – we get many of these every day of the week.
So why don’t I use watermarks? It’s a multi-part philosophy –
Watermarks look ugly. Whenever I look at a photo with a watermark,
often times, ALL I can think about is that watermark! It's so
distracting. Maybe this is just me.
Legitimate companies do not steal images to use commercially. So I
don’t have any logical fear there. *In case of emergency, break glass
and see #4
There are other services, like Tineye (and Google) that can help my
team easily find bottom-feeders.
We do register our images with the copyright office, so if someone
uses an image commercially without a proper license, it is an easy
lawsuit.
I don’t have to maintain two versions of each image – one with a
watermark and one without.
NOT using watermarks and using creative commons helps more and more
people to use your image freely for fun, which increases traffic and
builds something I call “internet-trust."
As image search and image recognition get better and better, there
will be no need to watermark things. In 1 year+, we'll be able to
r-click an image and choose "Google-find the original creator" --
there is a bit trail to first-on-the-internet.
Yes, last, there will be bottom-feeders that steal your stuff. I
call this the cost of doing business on the internet. These are the
Tic-Tacs that are stolen from the 7-11. It is impossible to maintain
100% of your digital inventory, so wanting "perfection" in your online
strategy is an illusion.