A system and methodology for encoding or decoding hidden data, such as a digital watermark, in raster media is provided in delta domain, a domain that creates a high-pass version of the raster media. Hidden data, such as a watermark, can be embedded in the general smooth region (low variance region) while a strong edge is preserved. A Mean-Square Error (MSE) reduction can be obtained by embedding the watermark in the delta domain. Using checkerboard-pattern watermark sequences and the delta domain, at least half of the total pixels in the image remain unchanged after watermark embedding. In order to recover the hidden data, some side information can be conveyed, in-band or out-of-band, to a decoder, such as various parameters used when performing the method. If protection from attacks, such as a JPEG encoding attack is desired, a location map can be provided to assist with hidden data recovery.