The agency of record is basically in charge of all the advertising a certain company does. Advertisers work through this agency to negotiate ad placements and costs.
Using an agency of record to handle ad strategies allows companies to have a single point of contact for their strategies. It also allows them to build trust with their agency. However, digital media has disrupted this strategy.
Digital media brought a need for companies to learn how to navigate social media marketing in order to connect with their audiences. Digital services also allowed companies to see analytics about their campaigns, quicker.
Some say digital media services brought up too many challenges for one agency to handle on their own. Because of this, the strategy has shifted to having multiple partnerships to handle all the facets of a marketing strategy.