Please see newer article here: https://wpdecoder.com/php/gravity-forms-placeholders/
Update 8/4/15: as of v1.9, Gravity Forms has added the ability to use placeholders, however, they don’t make it easy to hide the regular labels and show placeholder text only. Do do that, you will need to add the following line to your functions.php file:
add_filter( 'gform_enable_field_label_visibility_settings', '__return_true' );
Once you do this, you will be able to hide the label text under Appearance tab.
This is the outdated post from Oct 13, 2012:
I’m not sure why Gravity Forms doesn’t come with this option built in, but I like to have the field label inside the form field to save space. I could change the coding of the Gravity Forms plugin, but that would get overwritten with any updates. Instead, this plugin is a great alternative.
Gravity Forms Auto Placeholders
Reviewed by Laura Hartwig on Oct 13, 2012
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Adds Functionality that Gravity Forms Should Have Built In
It’s easy to use. Just install it and it works. The first time I used it, I assumed that there was no option of when to use it, that it would apply to all forms once activated, but after a little further investigation, I realized that in the settings, there is the option to check a box if you only want to use it on forms or form items with the class gfap_placeholder. With that option, I give this plugin a 5 star review.
Rating:
Learn more about Gravity Forms with my tutorials.