A rate control algorithm for logo insertion which does not require full decoding and encoding in compressed video is proposed. A perceptual approach is adopted in order to reduce the distortion introduced by the rate control. The start position of rate control is randomly varied for each frame so that the perceptual distortion is evenly dispersed across the whole picture. The number of rate-controlled slices is changed instead of the quantization scale in order to maintain original bit rate. Simulations show that the original bit rate can be maintained by the rate control without noticeable distortion. The proposed rate control algorithm can be easily extended to other transcoding applications.