File's image well displays PNG icon not actual PNG

I would like to replace the standard icon for an Automator application that I created with a PNG. Unfortunately, the resulting icon is the generic PNG icon, not the actual PNG image.

Steps:

• downloaded the desired image (512 x 512)


• verified that the image had a transparent background


• Opened the file's inspector window (⌘+I):

• Dragged the PNG to the image well:

The final result:

Is there a way to get the actual icon to be used?