St Luke's - which has produced a series of innovative campaigns for the likes of Ikea, Midland Bank and Eurostar since splitting from Chiat Day when the US-based organisation was sold to Omnicom in late 1995 - came second after Abbott Mead Vickers in industry bible Campaign's annual "agency of the year" poll.
Such is the impact it is making that just before Christmas it won the advertising accounts for both Clarks Shoes and the drinks company United Distillers - without having to go through the usual beauty parades.
The agency is based in London's Euston rather than the more usual advertising haunts of Covent Garden or Soho, and is run by an elected body called a Quest.
Chairman Andy Law claims that the revolutionary structure and innovative ways of working, which include devoting different rooms to specific clients rather than housing employees in individual offices, are behind the success of the 55-strong firm.
Its Ikea commercial is noted for its "kick out the chintz" theme, while its Eurostar campaign features the mercurial Manchester United star Eric Cantona. But the agency, which is ranked about 25th in the UK with annual billings of around pounds 50m, is perhaps best known for its campaign for Boots cosmetics that does not feature models.