We propose a new application of information hiding by employing the digital watermarking techniques to facilitate the data annotation in traffic surveillance videos. There are two parts in the proposed scheme. The first part is the object-based watermarking, in which the information of each vehicle collected by the intelligent transportation system will be conveyed/stored along with the visual data via information hiding. The scheme is integrated with H. 264/AVC, which is assumed to be adopted by the surveillance system, to achieve an efficient implementation. The second part is a Region of Interest (ROI) rate control mechanism for encoding traffic surveillance videos, which helps to improve the overall performance. The quality of vehicles in the video will be better preserved and a good rate-distortion performance can be attained. Experimental results show that this potential scheme works well in traffic surveillance videos.