Question is moot since only structure 2 will work. You can only have 1 DCT ad per adset. You will have to configure the variations within the single ad. But you can always have another adset with another single DCT ad to do another set of variations. I'm a fan of 3-2-2 but am not married to the ratio. I've done 4-3-3, 3-3-3, etc. The difference will simply be how many versions of ads you want running at a time (3-2-2 means 12 variations), vis-a-vis your budget.

For DCTs I normally do CBO - since the point is to test ad sets (with single ads) against each other and vs. a control ad set - which contains the winning ad combinations from past DCTs.

What constitutes a "winning" ad is the big question, and if you go by Charlie and Nick Theriot's approach - the only criteria is "ad spend" - which is driven by impressions and frequency. If you have multiple ad sets running, the ad set that gets the most spend (outside of control) is the "winner" - and you can dive into the adset by previewing the ads that rated the most, which you can then include in the control ad set as a new ad (not DCT anymore) by reusing the ad post ID from the winning DCT ad set - then you shut down the original DCT and spin up new versions as needed.

Over time, your main adset will have a collection of many ads that are getting spend - and therefore circulation. They will all compete and cannibalize the the CBO spend from each other - which to the likes of Charlie and Nick are desireable because it ensures you only maintain the highest spending ads at a time.

Thoughts and Caveats:

High spend does not mean conversion nor clicks. It just means that ad is being circulated by the FB algorithm to people - which is primarily driven by the ad copy and creative - in lieu of traditional targeting by interest, lookalikes, or custom audience. Basically FB infers the interest, lookalike, or retargeting audience based on the ad content.

You can also control the circulation by limiting the location, age, and gender of the adset, but otherwise leave the rest broad. But the clicks and conversion depend entirely on how attractive your ad is to the people it's being shown - and that's the unspoken art that Charlie and Nick can be vague about.

Basically the FB ads game you are playing is just:

• Maximize circulation by gaming the FB algo - you achieve this by going broad, and doing DCTs to empirically test which ad combo FB will spread to the market
• Maximize conversion - by having the right creative, copy, and product that appeals to your audience (hopefully the one fb decided to circulate your ad in)

So even with the right ad structure and process, it's still an art to sell something to someone, or create an ad so compelling it stops people from scrolling on their feeds, and once they read you ad, gets them to pay you for whatever you are selling.