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From the book Wrapping Area Type Around Objects

Wrapping Area Type Around Objects

Text wrapping is controlled as an object attribute and is set specifically for each object that will have Area type wrapped around it. These wrap objects affect only Area type objects that are both within the same layer, and directly beneath it in the Layers panel, and do not affect Point type or Path type. To make a selected object into a wrap object choose Object> Text Wrap> Make. To change options for the wrap object, keep it selected and choose Object> Text Wrap> Text Wrap Options. Here, you’ll choose the amount of offset; you also have the option to choose Invert Wrap, which reverses the side of the object that text wraps around.

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