Ok - I didn't provide enough background...
Clone layers are a 2D "projection" of whatever they clone (in most cases...). They do not have "Material" options.
The purpose of creating a Clone layer is so that you don't have to work with 2D Groups as your texture source. You CAN, however, simply convert the Groups used as "material" to 2D and apply the Group to the Image source drop well... However, Clones are generally better (and easier) to work with. You can still change the relationship of objects inside a cloned 2D Group to update the appearance of the Clone, if needed. Whenever you use a clone, be sure to turn off the visibility of the 2D Group or whatever you used for the source for the clone. Otherwise it will remain visible (and in the way!) [You might want to switch the Horizontal 02 Frame groups to 2D anyway, and still use the Clones - from your menu thumbnails, it looks as though the drop zones are out of alignment from the original setup.]
Material > Substance > Generic is the one option that allows you to create a "custom material" or "Texture" when you select the Image Option. Many texture image sources are made to be repeated at their edges, like wood grains and bricks etc... In *this* project, you want a drop zone with a wood frame -- which not a repeatable design. If you look right under the image drop well, you will find Wrap Mode. In this case, it needs to be set to none.
You need to dial down the Placement disclosure triangle (this will reveal everything from Placement to Rotation in the expansion) to get access to the controls you need to apply your material to a 3D Text object. You almost always have to make adjustments to these parameters to "fit" the clone material.

One of the first things you should do is uncheck Scale With Font Size which is always on by default. Once you set the scale to your liking, you can turn it back on, and if you have to resize the font using this texture, it will resize automatically and keep its "fit".
Keep at it! Keep asking question if you run into trouble. Like I said, it takes a little bit of time and practice to get used to all this. 3D Text is one of the most amazing features of Motion.