A method (100) of watermarking an image (101) is disclosed. The method (100) segments the image (101) into regions. Each region is then characterised based upon one or more statistical features of the respective regions. For each region, a watermarking method and a number of bits to be embedded into the respective region are selected based on the characterization of the region. The number of bits of data is then embedded into the respective region using the watermarking method selected for that region. A method (105) of decoding a watermarked image (145) is also disclosed.