Sustained creative excellence married to an impressive new-business record and several innovative launches saw Bartle Bogle Hegarty beat TBWA London and CHI.

It's 21 years since John Bartle, Nigel Bogle and John Hegarty decided to go into business together. The agency that bears their name was quick out of the traps. Even so, few would have predicted that in 2003 it would find itself in such good shape.

It's been a tough year for the big guys. The UK's largest agencies have been made to look cumbersome, slow and old-fashioned by the current crop of nubile young independents. The fact that BBH can easily trade blows with them is testament to the enduring vision and commitment of its two remaining founder members.

It's also a vindication of the agency's refusal to sell out completely to a holding company. In 2003, BBH's micro-network model served it well.

Two new Lynx briefs from Lever Faberge added £80 million to the agency's global coffers, while in Hoegaarden and Baileys, BBH found the London-based international accounts it had been seeking all year.

Not that BBH didn't catch the eye of domestic suitors. In spring, it persuaded Woolworths to ditch its long-time partner, Bates, for a new life at Kingly Street. It successfully wooed Cancer Research and Robinsons, edging out Clemmow Hornby Inge twice in the process (how many agencies can say they have done that?). And it also snatched Bisto and Barclaycard from the grasps of Saatchi & Saatchi and BMP DDB respectively.

But perhaps the most gratifying moment of BBH's year came in October, when the agency claimed the Castlemaine XXXX business while retaining the Boddingtons account, following a winner-takes-all pitch against the fellow Interbrew roster agency Mother. Not only did BBH strengthen its relationship with a founding client, it did so at the expense of the agency that had narrowly beaten it to the Agency of the Year title twice in as many years. It doesn't come much sweeter than that.

BBH's new-business successes would have been bitter-sweet were it not also producing good work. Fortunately, the agency kept its creative standards high. Barclays' "fluent in finance" campaign was made more user-friendly, new print offerings for Parker Pens, Ginsters, Barnardo's and Paddy Power were impressive, and the agency's sole TV execution for Audi, "fish", maintained the standards it set for the client in 2002. The agency also produced a jaw-dropping cinema execution for Johnnie Walker. The ad, which showed schools of amphibious humans leaping over waves, was a BBH signature piece; great music, stunning visuals, no dialogue.

No BBH year would be complete without a high-profile ad for Levi's. This year's offering, "a bold new breed", featured a gang of half-human, half-mouse hybrids kidnapping a cat and holding it to ransom. As with so many of BBH's campaigns, the theme was extended into other media.

2003 was also the year in which BBH finally cracked fast-turnaround retail accounts. Its "soul food" campaign for KFC was of a standard seldom reached by fast-food advertising. The work, which drew on Motown-style soul music from the 60s and 70s, revitalised the brand, helping KFC increase its sales in a declining sector. Early work for Woolworths looks equally promising.

But the creative highlight of BBH's year is undoubtedly its launch work for Lynx Pulse. The campaign, based upon the hilarious dance moves of a nerdy young man, generated a number-one single - for Room 5 featuring Oliver Cheetham - and £2 million worth of free publicity. Pulse is now the number-one Lynx variant with 6.5 per cent of the deodorant market.

BBH's creative capabilities have been well recognised this year - the agency landed seven D&AD silvers, three golds and three bronzes at Cannes, a silver at the Campaign Poster Awards and one gold and three silvers at Campaign's Press Awards. If this weren't enough, it ended the year by winning the Grand Prix at the Aerial Awards for its Ginsters radio campaign.

But what impresses most about BBH in 2003 is its ability to innovate and to manage succession. This year, it appointed Mark Boyd to head a new department dedicated to branded content, launched a glossy magazine, Zag, and set up Leap, a music publishing division that looks to turn BBH's musical golden touch into another revenue stream for the agency.

Underpinning all of this is the stability provided by the management triumvirate of Gwyn Jones, John O'Keeffe and Jim Carroll. It will have been a relief to them that the agency's deputy executive creative director, Russell Ramsey, was talked out of joining WCRS. And the ability of the head of TV, Francis Royle, and the new-business director, Richard Exxon, shows that BBH still possesses the useful knack of producing talent in its own back yard.

Although BBH was a clear winner, two others agencies seriously challenged it.

Clemmow Hornby Inge continued to win almost everything it pitched for - in 2003, the agency won £70 million-worth of business including the British Gas, Anchor, Expedia and Virgin One accounts, and its creative reel is beginning to take shape.

TBWA\London, with its strong work for John Smith's, fcuk, Sony PlayStation and McCain, was also a strong contender.

And a mention must go to Grey London, which, under its chief executive, Garry Lace, has been transformed into an agency that must fancy its chances on any pitch. In 2004, we will see if this turnaround extends beyond new-business into creative work.

Recent winners: Mother (2002); Mother (2001); Lowe Lintas (2000); M&C Saatchi (1999); BMP DDB (1998).