The TrueView For Shopping feature lets advertisers overlay videos with information on their brand, playlists and related videos.
Sridhar Ramaswamy, Google’s senior vice president for ads and commerce introduced the new feature at the ad:tech conference in San Francisco yesterday.
He said: "Our motivation overall is that there is a pretty big generational shift happening when it comes to videos. For the longest time, I would look at catalogues to figure out what to buy.
"My teenage sons are much more likely to search for videos. This shopping format tends to be an extremely natural addition to how people think about buying."
He told the audience that searching for recipes, an activity or a how-to video are opportunities for shopping ads, according to Fortune.
He said around two-thirds of brands experience an increase of almost 13% in their Google searches when viewers watch their ad on YouTube.
By seeing an ad while watching the video, YouTube hopes it will reduce the need for viewers to run a follow-up search.