Data frame, inserted pictures, and inset map are not transparent on output

Description

Maps containing data frames that overlap other data frames or graphics elements are displayed in ArcMap Layout view as transparent. However, when they are printed or exported, the top data frame background is opaque white, obscuring the layer below.

Cause

Each individual data frame or graphic object is processed separately. If the data frame or graphic element contains raster data, transparency, or picture symbology, it becomes rasterized. 'No data' or hollow fill areas, which look transparent in ArcMap layout, print or export as white, filling the entire background of the data frame or graphic element.

The apparent no data/hollow fill on output is not supported. The limitation of transparent graphics and transparent data frames containing rasters are limitations of the Microsoft graphics engine (GDI) implemented in ArcGIS Desktop.

Workaround

It is highly recommended to use ArcGIS Pro for printing and exporting, especially when experiencing issues caused by the limitations of the ArcMap display engine. More specifically, ArcGIS Pro is not restricted by the graphical device interface (GDI) limitations that some users experience in ArcMap. For example, transparency is natively supported in ArcGIS Pro, preventing the rasterization of layers. Additionally, ArcGIS Pro supports transparency in layout elements.

Note:
ArcGIS Pro does not support exporting directly to AI (Adobe Illustrator) files as it is a closed file format.  
It is recommended to export to the AIX format and use the ArcGIS Maps For Adobe Creative Cloud extension in Adobe Illustrator to open the exported AIX files.  
For more information on the subtle differences between ArcMap and ArcGIS Pro in drawing, please see the help topic: Visual differences in imported map documents

Since this is a known limitation in ArcMap, there is no way to preserve transparency between data frames with rasterized elements using ArcMap. The workarounds below concern either removing the rasterization, or modifying the layout to avoid obscuring other layers.

• Do not use transparent symbology, picture marker Symbology, nor include raster data in a data frame that obscures the layers behind it. If the data frame contains only vector data and neither transparency nor picture marker symbology, the transparency of the data frame background may be preserved.

Note:
In ArcGIS 9.2, use the 'vectorize layers with bitmap markers/fills' option, under the Format tab in the export dialog box, to prevent bitmap markers or fills from causing rasterization.

• Separate the graphic elements that contain raster data, transparency and/or picture marker symbology by themselves. Do not place these elements on top of other graphics or data frames. The output is a solid color background despite their appearance on screen, so plan the layout accordingly.