Extract into the ArmA 3 Directory, by default this is located in:
32-Bit - C:\Program Files\Steam/Steamapps\Common\ArmA 3\
64-Bit - C:\Program Files (x86)\Steam/Steamapps\Common\ArmA 3\
After extraction it should look like this:
You can also use the "Arma 3 Alpha" folder in your "My Documents" folder. Your folder setup could than look like for example this:
When present place the "userconfig" folder into your game install folder, usually:
"C:\Program Files (x86)\Steam\steamapps\common\Arma 3".
You may already have "userconfig" folder from other addons and/or mods in which case it is safe to merge the contents from this archive.
You'll also need to add a Launch Parameter to Steam, in order to do so right-click on ArmA 3 Alpha and click Properties and then Set Launch Options. In the window that opens enter in -mod=@your_mod_folder_name
For using multiple mods you would then do so like this: