One of the conditions for financial development of the country is successful activity of advertising companies. In modern digital economy, innovative approaches and technologies have to be used by advertising companies to increase their competitiveness in the domestic and international markets. In this article, we have suggested a model for managing the innovative development of a service sector enterprise, complementing the existing approaches to assessing the development of business systems. The goal of the study is in proposing methodological approaches to managing innovative activity of the subject in the advertising market. Modern theoretical foundations of innovation have been systematized in this model; the needs of innovation development for Russian companies have been discovered, the key problems limiting the development of innovations in the Russian advertising sphere have been identified, the development estimates and tools for managing innovations in the advertising sector of the economy have been classified. The existing approaches to monitoring and evaluating innovation activity of an advertising company have been considered in terms of adequacy and applicability. The study is based on methods of statistical analysis, systems approach, comparative effectiveness of decisions made, expert assessments. Innovation activity yields favorable results not so much through production and implementation of innovations, but rather as a result of efficient and high-quality management, analysis and planning of the company's development process. Consequently, constructing a model for managing the innovative development of an advertising company has a governing role in this task. An innovative solution for generalizing advertising by the method of spatial positioning (geo-targeting) has been proposed and tested for the conditions of the digital economy. Compared to traditional methods, the method provides an opportunity to advertise the places where goods, services, and local useful information are tied to localization of the target audience. Practical application of the developed methodology combined with existing approaches should allow to identify the factors that impede the competitiveness of Russian advertising companies in the digital economy through transition to a new model of development based on generating and implementing innovations.