spoil festival is done to spoil lots of targets in the same row, so yes it's for AoE or a big pull/adds.
In fact you may have to know if it's better for u to spoil each mob or use spoil festival. if it cost more MP to spoil mobs one by one, u will use spoil festival, without knowing which mob is spoiled.
Its a waste of mp. If you pole most of the time, you will not have the time to pick out which mob you killed to sweep it while getting the bejeeezuz beat out of you by the other 10 you pulled.
I noticed on the updates that dwarves get yet another spoil skill (high end) but what we really need is a sweep festival that is capable of being used repeatedly in pole party.
Generally you should use Festival if you pull 4 or more mobs to save on MP cost. I disagree with MelaQuinn about Festival in AoE. If you practice enough, it is not that dificult to sweep a good portion of the mobs as they start dieing off. It requires a bit more attention, but I'm usually very attentive when I'm pulling trains. Once you exceed 10 mobs though, it becomes more difficult.
By rule of thumb it is easiest to sweep mobs of the same type in a single pull. When you start to pull several different shapes and sizes of mobs they stack kinda funny and can make it a chore to target the smaller mobs. In places like the Catacombs on the 2nd week of 7 signs, you can pull the aggro from 2 rooms (8 mobs) and they will be 2 different types of mobs. Kill them. Then go back and grab the rest of them from the same 2 rooms, so they should all be the same type of mob. This will be the best case scenario for using Spoil Festival IMO.
The trick to not getting your [censored] beat out of you while you're sweeping is to party another poler. Since he hits more often, he'll get the aggro off you pretty reliably. Warsmiths are nice since they can help sweeping up, Destroyers and Warlords on the other hand have a higher damage output, so they keep the aggro off you easier.
I usually spoil festival in catas. even if im only puling 2. i dont have time to spoil 2 to 4 times. i might end up dead trying to spoil and cast a seed on every mob. takes so long to kill mobs, that i usually have plenty of mp.