Unlike shapes, pictures in PowerPoint don't have a transparency setting. As a workaround you can fill a shape with a picture and then adjust the fill transparency. Here's the step-by-step guide for PowerPoint 2010 and later:
- Add a rectangle shape to the slide.
- Right-click the rectangle and select Format Shape from the context menu.
- Select Fill → Picture or texture fill and click on Insert picture from → File... to choose an image file.
- Use the transparency slider to make the picture as transparent as you want.