What I don't understand is why auction companies advertise that they will sell property on the spot, yet there are negotiaitions after the auction.

I do note that I have not seen PAG advertising this, but I do see other companies doing so.
I took that to mean that the reserve wasn't met by the highest bidder, and rather than everyone involved in the process losing out on their commissions, they're "negotiating" with both parties. (and, by "negotiating", of course I mean that you go to the seller and say "you know, in this sinking market, you may not be able to get that good of an offer again if you wait six months,", then you go to the buyer and say "you know, this market is turning around, and you may not be able to get a price this good again EVER!"
So, at this point, the auction was 50% successful ... one sold at or above reserve (presumably) and the other auction did not receive any bids at or above the reserve price.