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Now I’m not sure if large signs should be kerned like normal sized type on a page. If they need a bit of tweaking, should you tighten the kerning and tracking or loosen it?

I know generally small type you want looser kerning and tracking, and larger headlines you want tighter kern/track, but with signs they’re generally read from a distance, right?

What else should I take into consideration when deciding about the tracking of signage?

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    Depends upon the type/words. – Scott Jun 3 '15 at 22:53
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tl;dr

Open it up. There are so many environmental variables that can negatively impact legibility. Giving the letters a little more room will help mitigate those effects. Wider, more open letterforms tend to perform better for the same reason. Just make sure the word spacing is adequate.

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Signs are different

There are a number of ways in which signs are different from normal printed typography. The variables are too numerous to list here, but here are some of the high points.

  1. Viewing distance. This is inherently variable in signage, but the "average" or designed distance is the one that matters: What is the ideal distance for viewing. Design to that, then factor in variability and compromise.
  2. Viewing angle. Another variable dimension that can have disastrous effects on your sign. Is it going to be well above eye-level? Will users approach the sign at an angle?
  3. Lighting conditions. Will this be back or front lit or is night visibility not a concern? If it's back lit, will the type or background be lit?
  4. Speed of approach. Are your viewers walking, biking, on a train, in a car? How quickly they approach and where attention is focused makes a big difference.

A fantastic primer on the topic is the work James Montalbano and team published on Clearview Hwy.

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And make sure people don't run into your sign either. That sucks.

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As Scott says, it depends. I'll add that it's more art than science but that as you increase the size of a font you need to increase the attention you pay to letter spacing precisely because viewers may read the text from two feet away or 200 feet away.

I like reading through standards guides for highway signs. There's a lot of science backing up that stuff and while not the most creative result you'll get something that a) works and b) most of western civilization is accustomed to reading.

Here's a good one http://mutcd.fhwa.dot.gov/shse/alphabets.pdf and the state of CA has some cool stuff http://www.dot.ca.gov/hq/traffops/engineering/control-devices/specs/CASignSpecs2014.pdf

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