Component Parameters

Hello! I am trying to learn components and parameters. I have a very simple component set up–a div with an image (transparent background PNG) inside of it.

I want to have a parameter to change the background color.

I have added this:
{
“bgColor” : {
“label” : “Background”,
“type” : “color”,
“initial” : “#000000
}
}

But when I select the background color, nothing changes. Am I supposed to add this parameter to the div or to the image? I’ve tried both, but nothing is working!

I can go to the Primary tab for the Div or the Image tab for the image and successfully change the background color in my component document, but I can’t seem to figure out where to put this JSON code, so that the PARAMS tab actually changes the background color!