The field of digital watermarking has recently seen numerous articles covering novel techniques, theoretical studies, attacks and analysis. We focus on practical challenges for digital watermarking applications. Challenges include design considerations, requirements analysis, choice of watermarking techniques, speed, robustness and the tradeoffs involved. We describe common attributes of watermarking systems and discuss the challenges in developing real world applications. We present, as a case study, a hypothetical application that captures important aspects of watermarking systems and illustrates some of the issues faced.