A method for reducing overhead when transmitting an Internet Protocol (IP) packet begins by selecting a watermarking signature based on the IP address of the packet. The watermarking signature is applied to the packet and the IP address is removed from the packet. The packet is sent to a receiver, which looks up the IP address of the packet by using the watermarking signature. The watermarking signature can be a radio frequency watermarking signature or a digital watermarking signature. A similar method employing watermarking can be used to reduce medium access control header overhead.