Once the confectioner's sugar and butter has formed a sandy consistency, add half of the cream cheese (4 ounces) to loosen the mixture. Beat until smooth. Once the mixture is smooth, add the remaining (4 ounces) cream cheese and 1/2 teaspoon of vanilla extract and continue mixing on a slow speed until incorporated. Once the mixture is smooth, turn up the mixer's speed to medium-high and beat for 2 to 3 minutes, until light and fluffy. Be careful not to overmix, or the frosting will turn liquidy.