You can set up different relationships between pictures and text by controlling how the text wraps around a picture. You can choose text wrapping options by clicking the Text Wrapping tool on the Picture toolbar.
Text wraps around the frame rather than around the picture itself.
Text wraps around the outline of the picture itself rather than around the frame.
Text wraps around the perimeter and inside any open portions of the picture.
Top and Bottom
Text stops at the top of the picture's frame and continues after the bottom of the frame.
Text acts as if the picture isn't there.
Edit Wrap Points
Text wraps around the picture's perimeter, which you define precisely by repositioning points along it.