Numbers are not the only measure of success in this highly dynamic market, however. Creatively, the UK is going through a purple patch. Long acknowledged as a world leader in the ad business, big wins for the Brits in this year's festivals at Cannes and Kinsale underlined the market's confidence.

Rupert Howell, president of the IPA and chairman of one of London's top creative agencies, HHCL & Partners, believes a number of macro-economic factors contribute to the upbeat mood.

"There is a high approval rating for advertising from the public, the government is pro-advertising, the economy is strong and financial analysts increasingly judge the health of companies by how much they invest in their brands," he says. In addition, he believes old antagonisms between agency planners and creatives have largely disappeared, resulting in an environment in which agencies can create "excellent and effective ads."

Nor have threats from rival media (notably below-the-line and online) undermined tv's role as the lead player in commercial communications, he says.

"Anyone predicting the demise of the TV ad is wrong. We have just won the account for amazon.co.uk. Even though Amazon services customers one-to-one online, they know that tv plays a key role in building a broad-based brand."

Howell believes a sign of the UK's creative strength is its ability to produce effective commercials across a broad range of sectors.

"I think clients with small budgets can always find a way to shock audiences. But the UK industry can make a whole range of blue-chip products come alive. If you look at a typical ad break, most of the work has some merit. The same can't be said of many other countries."

This broad-based creativity is fed by a large pool of agencies. While the likes of Abbott Mead Vickers BBDO, Bartle Bogle Hegarty, BMP DDB, HHCL and Leagas Delaney are regularly cited as creative hothouses, "a lot of agencies are now producing great work," says Howell.

Lowe Howard-Spink, for example, picked up the Grand Prix at Cannes for "Litany" (client: The Independent Newspaper, production company: Helen Langridge Associates, director: Rob Saunders) and also at IAPI's Kinsale-based event for "Sorry" (client: Hornby Hobbies/Scalextric, production company: Paul Weiland Films, director: Vince Squibb.)

Other agencies vying for the creative mantle include TBWA GGT Simons Palmer, which launched a groundbreaking series of animated spots for NatWest bank this summer, Rainer Kelly Campbell Roalfe, M&C Saatchi and Young & Rubicam, which produced what Howell calls "highest common denominator Pan-European work for Ford (director Paul Street for Ford Puma and Ford Cougar)."

WCRS is also highly regarded for its creative work, exemplified by its consistently high-quality ads for mobile telco Orange.

The view from the shop floor supports Howell's claims to creativity. But there are clear signs that the pressure on agencies and production companies is mounting. BBH head of television Rebecca Atkinson says shorter production schedules are increasingly common as clients try to stay one step ahead of their competition. "Except for pan-regional campaigns, the days of the big, glossy production that lasts (on air for) three years are gone. Ads have a shorter shelf life because everyone is constantly looking to reinvigorate their brands," she says.