And it wasn't long before a Santa Monica BMW dealership responded by buying space on a nearby billboard featuring a photo of the BMW M3 with the retort, “Checkmate".

Determined to come up with a witty retort, Audi created a Facebook page, encouraging fans to submit their own “virtual” billboard slogans. Some clever answers included, “Check yourself,” “Chess? I’d rather be driving” and, “Think again.” They then unveiled this:
I think a more simple and direct response could have made more of an impression as this doesn't seem to have the same cheeky punch to it as the other, shorter lines. BMW kept their cool by taking their billboard down altogether after seeing this.
“We would not look at it as a billboard war,” said Tom Salkowsky, a BMW spokesman. “When you step back, there is just a tremendous amount of good, competitive spirit.”
Another interesting read: http://americatopten.blogspot.com/2006/12/advertisement-war-bmw-started-it-audi.html

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