When using the Label tool to annotate, text doesn't change scale

Description

After adding annotated text with the Label tool, the text doesn’t change scale when zooming.

Cause

The Label tool adds annotation to the Active Annotation Target. Each Annotation Target has a reference scale that controls text size as the map scale changes. By default, the reference scale for a new Annotation Target is 0; text in this target will not change scale as the map scale changes.

Solution or Workaround

• Set the Data Frame reference scale from the Data Frame Properties dialog box.
  
  This is the most flexible solution because you can toggle this on and off. It affects all the symbology in your map including layers symbology. For example, line thickness and marker sizes will scale as the data frame scale changes.
  
  
• Create a new Annotation Target and specify a reference scale. Set as the active target with the Label tool.
  
  This option is available from the Drawing toolbar > New Annotation Target dialog box.
  
  
  A new Annotation Target does not toggle on and off, and affects only one annotation target. It is a permanent setting; modifying the reference scale is not an available option.
  
  

  Note:
  To move annotation from one Target to another: set the Active Annotation Target, select the pieces you want to copy, Copy, then Paste. (Paste always places objects into the Active Annotation Target).