Although the name may be confusing, especially in digital world, a watermark is a mark or lettering superimposed onto the photo showing who its owner is: a photographer, a company or a website. It is a technique known already for ages and is still used for example in marking banknotes. More commonly people associate watermarking with signing the works of art by famous painters, though artist like da Vinci or Picasso did not watermark their pieces, they simply signed it, but the idea of signing someone’s work is applicable.
Michelangelo, Monet, Rembrandt and many other famous painters made this kind of a watermark for years and now it looks artistic.
They didn’t call it “a watermark”, but it helped them to solve the problem what is a watermark for. You can make a watermark easily on your computer.