What are Incense?
Incense are items that lure Pokémon to your location. One activated Incense typically lasts for 30 minutes but may last longer during special events. You can also activate multiple Incense at a time to stack the duration of their effects for up to 24 hours instead of using one every 30 minutes.
Incense in your inventory may change color during special events. If you notice your Incense are a different color than usual, it means you can use them to attract special Pokémon that wouldn’t appear normally. Keep an eye on the Today View to see what in-game events are in progress.
Daily Adventure Incense
Daily Adventure Incense is a special type of Incense that will attract unexpected wild Pokémon to you for 15 minutes as long as you are moving in the real world.
Daily Adventure Incense is automatically added to your Item Bag once daily at 12 a.m. local time. Note that you can only carry one Daily Adventure Incense in your Item Bag at a time and it must be completely used before midnight local time to receive the next day’s grant. Be sure to use your Daily Adventure Incense before 11:44 p.m. local time to ensure you receive the next day’s Incense.
Once you activate your Incense, it will last 15 minutes, but will only attract Pokémon to you if you are moving in the real world. If you have 30 or fewer total Poké Balls, Great Balls and Ultra Balls in your Item Bag when you activate your Daily Adventure Incense, you will be automatically granted 30 Poké Balls. You will not receive this grant if you do not have any available Item Bag space.
Source: Official Pokémon GO support page