Type your text, preferably choosing a balloon-size font (to allow for the photo) and make it 48 or 72pt. You might want to remove the outline first, or not depending on what you want to achieve.

Import your photo, then size it on top of the text, just slightly overlapping.

Move the photo away from the text, then grab it with a right-click of the mouse. Move it back over the text; a pop-up menu should appear. Click on "power clip inside," and your photo will appear within the text.