Here's a link to a comprehensive guide about Pokemon Go. He talks about Incense near the bottom of his post, I will copy it in here for clarity.
How does moving affect how often Incense spawns Pokemon?
According to some game data files:
- StandingTimeBetweenEncountersSec: 300
- MovingTimeBetweenEncounterSec: 60
- DistanceRequiredForShorterIntervalMeters: 200
This means, in order to maximize the rate at which Incense spawns Pokemon, you need to walk 200 meters a minute. That’s a lot, and you’d basically need to be moving 7.5 mph (most people jog at 4-5 mph) do that. So if you’re at a brisk pace of ~3 miles per hour, you’re still getting spawns every 2 minutes or so, as opposed to every 300 seconds (5 minutes) while standing still.
Basically, what he is saying is that to optimize the usage of your incense you should be at least walking or to get the most out of it you should either jog or run.
Other questions answered:
Q: Do they lure actual pokemon in your vicinity to your location, as in do they move from where they are at toward you?
A: No, Pokemon around you will not move to your location, your incense will spawn new Pokemon for you.
Q: Can other people make use of your incense?
A: No, others will not see Pokemon spawned by your incense. You can tell which Pokemon were spawned by your incense if you look at them on your map. The Pokemon will have a pink mist circling around them.
Q: Does the area you are at affect the type of pokemon that are drawn to you?
A: I am not too sure about this, maybe someone could help out with this question. From my experience, I have been getting Drowzees, Bellsprouts, Pidgey and Jynx which are all common to my area.
