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Saturation is the intensity of color, and the more an image is overexposed, the less saturation it has. So, on bright sunny days, it's quite possible that the image looks washed out. If you're shooting RAW, you'll almost always want to tweak saturation. Oftentimes, when shooting JPEG, the camera will do it for you, but even then, there's still often a real need to make a tweak. Here is an example where the photo looks fine. I'll put a little more contrast in with Levels, and that helps a bit, but the image is just lacking color.
Dragging to the right makes a much more interesting image, and you see that the texture of the rocks and the color of the water is really coming through. Let's take a look here at another photo. We have all these great hats here, and while it's a perfectly fine image, putting in some Saturation, and some Definition for some selective contrast really makes a big difference. Notice, it goes from being an interesting photo, to one that's truly vibrant, and captures your eye.
Our last image here is another graphic type element. I would push the saturation a long way there. And Definition is also great, because that will improve the intensity of the color. A little bit of a Contrast, and I'll pull the Exposure down, and if you look at the before and after, you see that Saturation really helps bring up those greens and lushness in the graffiti.
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