A family of Microsoft presentation graphics products that offer tools for creating presentations and adding graphic effects like multimedia objects and special effects with text.
Let's forget "Background Image" and call it only "Image"!
1. Format Slide Background Color with the desired solid color.
2. Place the Image over the whole slide.
3. Set the oval shape in place over the Image.
4. Select the Image plus the oval - by this order - set "Merge Shapes/Intersect"!
§. Assuming that the initial transparent oval was intended to darken or ligthen the image...
***a.*** *Select the "ovalized" image, use "Picture Format" to apply Picture Corrections like - Brightness&Contrast, Transparency, Sharpness, Recolor, etc...*
Or... Follow steps 1 to 4, add a 5. - Duplicate the "imaged" oval, change Fill to a Solid Color, set desired transparency and place it over the "imaged" oval.
There are a few technical, better, easier and "more reliable" ways to get the samevisual result, but it would require a deeper knowlege of PowerPoint...