This effect is created with the help of Smart Objects. In order to edit the file, you need to place your graphics in Smart Layers from the "Edit Content" folder  (marked with green). 

To do so, double-click the layer's thumbnail. It'll trigger the new tab to be opened. Drag & drop your own image in the indicated layer, don't forget to hit Cmd+S (or Ctrl+S) to save the applied changes. Then go to the main tab with the effect and watch it applied!

Thanks, 
Pixelbuddha & DesignSquad