There's no monkey business about the success of Fallon

It made 'Gorilla' for Cadbury but Fallon must fight for its key account with Sony, reports Ian Burrell

So Fallon – arguably Britain's hottest creative ad agency - must prove itself to Sony all over again.

You remember the coloured bouncy balls in San Francisco, the Glasgow tower blocks exploding with paint, the play-doh rabbits in New York and the footballer Kaka revolving in a Veotrope in Italy? These ads for Sony Bravia televisions revitalised what was once the world's biggest technology brand and made Fallon's reputation.

Now, after more than six years, the Japanese giant has ordered the London agency to prove its worth again by re-pitching for the business. It's a pivotal moment for Fallon, which is allied to Saatchi & Saatchi beneath the global umbrella of the French-owned Publicis Groupe. The agency is also known for its award-winning Gorilla spot for Cadbury's Dairy Milk, a client which is set to re-launch itself as a fair-trade brand, using work inspired by the chocolate producer's century-old links to cocoa growers in Ghana. That work, promises Fallon chairman Laurence Green, "will be quite perky".

Green still remembers when the upstart Fallon snatched the Sony account from some of the giants of adland, beating Abbott Mead Vickers, DDB, Bartle Bogle & Hegarty and (then rivals) Saatchis over a two-leg pitch in Berlin and Amsterdam. Since then Sony has given the young agency "an extraordinary platform on which to perform", he says, stressing that the re-pitch procedure is a statutory requirement.

"What Sony will do is ask agencies to prove they have got the next generation of creative ideas. Almost by definition they are a business that lives in the digital space. Their culture is to be always looking round the corner," he says. Fallon won the Sony account with the "You Make it a Sony" idea, emphasising the role of consumer engagement with the products, before switching to the much-lauded "Colour Like No Other" campaign.

But not all Fallon's work is for global giants. The venerable publishing house Weidenfeld & Nicholson has commissioned Fallon to mark its sixtieth anniversary by designing cover artwork for such classics as Vladimir Nabokov's Lolita and Alice Walker's The Color Purple. Green is also thrilled that the agency has also won the business for such British institutions as Jammy Dodgers and Maynard's Wine Gums, brands from Burton Foods. "We are open for business in all creative fields," he says of the diversity of clients.

These are dark times for the greatly oversupplied advertising industry but Fallon deny that they will compromise their creative reputation by taking any work they can get. Marketing chiefs know how Fallon works and, when they hire the agency, are "implicitly agreeing" to its left-field approach. "Agencies, client lists and their partners are pretty self-selecting," says Green. "We are 11 years old this year and we've always been pretty clear about what we stand for."

Fallon's ethos is shaped by what he describes as the "weird people" working there. "We hire from a generation of people, younger than me, who understand the way the world is currently configured and want to be the first people to create an app or redesign something rather than just get a 30-second film out of the building shot by the latest director," he says.

The agency moved last summer to a new modern complex with areas for young creatives to socialise and a cinema room where pitches can be made to potential clients. "There's lots of space for people to hatch plans because ideas can bubble up from anywhere," says Green of the informal atmosphere. "We are not a very meeting driven culture, we are not very good at agendas and minutes."

It was Fallon to whom the BBC turned when trying to rebrand the Children in Need mascot, Pudsey the Bear. His previous iteration was "a stuffed and stuffy teddy bear, a denigrating picture of a child in need", says Green. "We thought that the charity should be a celebration of childhood and what children can be – not just Victorian objects of pity. So we tried to make him younger, cooler and more sociable."

The agency has also taken on the Orange Gold Spot account, first familiar to filmgoers for a campaign which included Rob Lowe making a movie pitch to the crass Mr Dresden and his board (an ad produced by the London-based Mother agency, which rivals Fallon for creative edge). Fallon was so respectful of Mother's work that it retained Mr Dresden and developed it, with ads such as Saving Private Ryan's Number, starring Emilio Estevez in a phone-orientated mini spoof of the Stephen Spielberg original.

Fallon's success has generated some jealousy in the industry, with barbs flying online, where new work is quickly at the mercy of anonymous critics. Executive creative director Richard Flintham admits he and Green are not immune to such attacks. "I don't know that we are thick-skinned enough, even with our long time in the industry, that we can just bounce back from some of the terrible things that are said on websites and blogs."

But such is the self-confidence here that the new building last month played host to the Fallon Festival, a series of talks on the future of media by the likes of PR man Matthew Freud, Radio 1 controller Andy Parfitt, Ian MacGregor, editor of the Sunday Telegraph, and Thomas Gensemer, the man who masterminded Barack Obama's online presidential campaign.

Fallon enjoys a debate. "Everybody has a great big power of veto card," says Flintham. "If Benny the handyman says, 'I've been thinking and I'm not sure that new Sony thing is any cop, but I've got a better idea' then, if it's great, we'll be shouting it from the rooftops." Then he emphasises that weirdo thing again. "We try and hire slightly odd people," he says.