Edit photos
Move annotation photos
In order to position the pictures more exactly, select the "Select elements" tool from the ArcMap symbol bar and mark the picture with it.
Then move the pictures to the desired location using the drag & drop operation.
Change size
You can change the size of the annotation photos later by right-clicking on the picture with the "Select elements" tool and then selecting the option "Attributes". Here you can specify the size of the picture.
After selecting the picture the size can also be adjusted with the "Resize anchor" points in the corners of the annotation.