Annotation groups are useful for organizing map document annotation and graphic elements because they make it easy to toggle the display of many pieces of related text. In addition, you can associate an annotation group with a particular layer so its text will be automatically turned on or off as the layer is turned on or off in the table of contents.
You can create a new annotation group using the New Annotation Group command on the Draw toolbar or by clicking the New Group button on the Annotation tab of the Data Frame Properties dialog box. Annotation groups are also created for you when you convert labels to map document annotation or convert features to graphics.
You can also manage your annotation groups on the Annotation tab of the Data Frame Properties dialog box. You can turn annotation groups on and off, create new groups, delete groups, and edit annotation group properties including reference scale, as desired.
When you add new annotation or move existing annotation between annotation groups, you should be aware of the active annotation target. Any annotation you add to your map using the Draw toolbar tools when you are in data view, as well as any map document annotation you add while you are in layout view and working inside the data frame, is added to the active annotation target. Any annotation that you paste from the clipboard is also added there.
By default, annotation groups will be drawn using the coordinate system being used for the data frame. You can change the coordinate system by clicking the Change button on the Annotation tab of the Data Frame Properties dialog box. This can be useful if you want to project the graphics differently from the feature layers, for example, to draw a line that adheres to the direction characteristic of a particular projection.