These are the screen grabs for this same technique but using FE Burn Film instead of Compound Blur. The benefits of precomping are a bit more obvious in this example. I've included the footage file if you want to follow along.
Here we see the footage without the effect applied. If you look closely, you can see that the psd file is smaller than the comp:
Here we've applied the effect. Note the hard edges. Pretty gruesome.
Here the page is almost burned, but we still have those hard edges.
But you can see that after precomposing, the hard edges are gone.
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