Problem adding full width header image to Blog page

Right now that blog page is archive of posts in blog category (posts assigned with category = blog), so it doesn’t use template-blog.php page template.

To use a page template, we must first create a page (in this case, name is Blog), then assign the page template to it. To assign page template to a page, look over the right side of content area, the option is in a metabox called page attribute.