A publisher is ready to share their earnings or a bonus with a user to motivate them to perform a target action. Such traffic may be quality but there is a high risk that it will be low-grade.
Example of low-grade incentive traffic: Active Advertising Systems. Here's how they work. Suppose that an advertiser pays $5 for every user who registers in an online game and tops-up their balance (thereby confirming they are an active player). A publisher wants to deceive the advertiser. They resort to the Active Advertising System and publish a task, "Register in the game following my link and top-up your balance by 3 cents. $1 per registration." A user doesn't need that game, nor do they plan to play it. But, money has a persuasive way, the user is ready to provide a few sign-ups. On the other hand, the advertiser doesn't need that traffic as it won't bring activity or income.
Example of quality incentive traffic. A publisher (e.g. a blogger) starts a giveaway with the only condition: a participant needs to purchase an advertiser's product to get a reward from that advertiser or host (blogger). While users are motivated by the prize, they are loyal to the brand as they are truly interested in making a purchase. So they buy to get a prize. Another good example is mobile apps that need a lot of installs at the early stage — to get to the application store's top. But, in this case, the advertiser sets all this out in the terms, while the permission for incentive traffic only remains valid for a limited period.