Hi CM, Hmmm… that’s strange. After dragging on the watermark from the Photo Basket (at the bottom of the editor), you should be seeing a white box around the layer. If you aren’t, please try exiting your web browser completely and then re-launching Ribbet. This restarts Adobe Flash, which should resolve the problem.
If you continue to have an issue you can contact us here so that we can help you out one-on-one.