You could just glue your CraftID to the surface of your piece. It generally looks better though to embed the CraftID [Installation Tutorial]. This is accomplished by drilling a shallow hole with a Forstner or similar flat bottom bit. Forstner bits work best because they leave a nice clean edge.

Most woodworkers like to embed their CraftID such that the face is flush on the surface. Since sanding a CraftID is not recommended it is important to drill the mortise depth with some care and precision. If you plan to embed your CraftID proud or shy of the surface you might consider easing the exposed edge prior to affixing the CraftID. Any of these solutions can result in a professional looking piece. So let your artistic preferences guide you.