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Actually, MY preferred watermark would have a visible part, aka pseudo-bookplate, perhaps straight after the cover image, and SHOWING the user that the ebook contains some nominative data, and perhaps explaining the what and why of the watermark.
As such, it would already be a quite enough "deterrent" for the vast majority of the "casual sharing" that is targeted by DRMs, without the freedom-loss due to cryptography based DRMs.
If the information is also included invisibly inside of the books, I don't really see it as problematic.
In France, one of our ebooks distributors (Immateriel) does two kinds of Watermarking :
The first is completely hidden. I find it disturbing that there is no visible mention of the watermark.
The second adds a "visible" (but greyed out) mention at the end of each "HTML" page-break. This one is also not really good due to it's intrusiveness when reading.
However, even if not satisfying, I find them MUCH better than cryptography-based DRMs, and thus push for them.
The biggest problem however with the situation, is that while the distributor supports Watermarked (and DRM-Less) ebooks, on it's e-library and sale streams, the biggest e-retailers (Kobo, Amazon, Apple ...) don't, with the consequence of "upgrading" the protection to cryptography based DRMs.
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