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I'm looking for some suggestions for labeling a a town that includes residential and urban areas that are extremely dense. So far, the only progress I've made has been by using the "reduce font size" feature in the labeling options, but it has still proven to be unsatisfactory and the font reduction engine seems a bit non-intuitive and poorly prioritized. It doesn't make sense to make the size very tiny everywhere, because there are portions of the map that are not dense at all, and lend themselves to a larger font size. I've attached what I have below, and it's a complete mess. Are there any better ways to label a line feature class that is at times incredibly dense?

enter image description here

Below is the old map. Their labeling seems very intelligent, and almost annotation-like (labels look hand-placed with intuitive leaders), and I'd ultimately like to get it looking close to, or exactly like that if I can.

enter image description here

I am using ArcGIS 10.3

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    Rather than asking an unfocused question looking for suggestions I think you should focus on why you are not getting the expected results when you use Reduce Font Size. – PolyGeo Sep 21 '17 at 21:29
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It looks like the font size you have there is much too large for the scale you are labeling at. Reducing the font size for the whole label class rather than using the reduce option will give much more consistent labeling.

Presumably you are using the Maplex Label Engine - the ArcGIS help has useful guides and tutorials to getting the best results, particularly for street labeling. It looks like the old map is using horizontal offset labels, with maximum offset used, to allow labels to move away from the feature. I don't think ArcMap can produce leader lines like those in the example image though, they may have been created manually.

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The approach they probably took on the map below was "convert labels to annotation", then manually placed the ones which were overlapping, they also used two different font sizes for main and secondary roads; you should tweak the labelling settings and use a narrow font to come closer before converting to annotations.

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